CVR Partners LP (UAN) Q3 2024 Earnings Call Highlights: Strong Sales Amid Operational Challenges

In This Article:

  • Net Sales: $125 million for the third quarter of 2024.

  • Net Income: $4 million, or $0.36 per common unit.

  • EBITDA: $36 million for the third quarter of 2024.

  • Distribution: $1.19 per common unit declared for the third quarter.

  • Ammonia Plant Utilization: 97% for the third quarter of 2024.

  • Ammonia Production: 212,000 gross tons, with 61,000 net tons available for sale.

  • UAN Production: 321,000 tons for the third quarter of 2024.

  • UAN Sales Volume: Approximately 336,000 tons at an average price of $229 per ton.

  • Ammonia Sales Volume: Approximately 62,000 tons at an average price of $399 per ton.

  • Direct Operating Expenses: $56 million for the third quarter of 2024.

  • Capital Expenditures: $10 million spent on capital projects during the third quarter.

  • Total Liquidity: $150 million, including $111 million in cash.

Release Date: October 29, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • CVR Partners LP (NYSE:UAN) reported net sales of $125 million for the third quarter of 2024, indicating strong financial performance.

  • The company achieved a high ammonia plant utilization rate of 97%, demonstrating operational efficiency.

  • Ammonia and UAN prices increased by 9% and 3% respectively compared to the third quarter of 2023, reflecting favorable market conditions.

  • The Board declared a distribution of $1.19 per common unit, showcasing the company's ability to return value to shareholders.

  • CVR Partners LP (NYSE:UAN) ended the quarter with total liquidity of $150 million, providing financial flexibility for future investments.

Negative Points

  • UAN sales volumes were lower due to unplanned downtime at upgrading units, impacting overall sales performance.

  • Net income for the quarter was relatively low at $4 million, which may concern investors looking for higher profitability.

  • Direct operating expenses were $56 million, which, despite a decrease, still represent a significant cost burden.

  • The company anticipates potential downtime in the fourth quarter due to issues with a third-party air separation unit, which could affect production.

  • Geopolitical risks and natural gas price volatility in Europe pose ongoing challenges for the nitrogen fertilizer industry.

Q & A Highlights

Q: With the river levels on the Mississippi abnormally low again, is that having a positive impact on corn belt prices for UAN and ammonia? A: We haven't seen any major impacts on either of those. A lot of the ammonia was positioned already, and there's a lot of ammonia that moves into the corn belt from pipeline. And same on UAN, a lot of what's needed in corn belt moved by rail. So it hasn't had a big impact on the marketplace. We're watching it closely more for grain movements. So as harvest is nearing completion, the ability to move grain could be impacted. And so, we're following that closely to see how high storage gets and the ability to move grain from the Midwest to the Gulf. - Mark Pytosh, CEO

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