Analyst Note| Seth Goldstein, CFA |
Compass Minerals’ first-quarter results showed tangible progress on the company's goal to fully restore its low-cost salt operation. In salt, adjusted EBITDA was up 37% versus the prior-year quarter as higher volumes and lower unit costs were partially offset by lower highway deicing salt contract prices. During the quarter, salt unit production costs fell nearly 13% from the prior-year quarter. The results were consistent with our view that Compass would be able to sharply reduce costs as it fully restores the low-cost Goderich mine. With our outlook largely unchanged, we maintain our $78 per share fair value estimate. Our wide moat rating, based on the firm's cost-advantaged salt production, is also unchanged.