On October 30, 2023, CVR Partners LP (UAN, Financial), a manufacturer of ammonia and urea ammonium nitrate (UAN) solution fertilizer products, announced its Q3 2023 earnings. The company reported a net income of $1 million, or 7 cents per common unit, on net sales of $131 million. This is a significant turnaround from a net loss of $20 million, or $1.87 per common unit, on net sales of $156 million for the same period in 2022. EBITDA for Q3 2023 was $32 million, compared to $10 million in Q3 2022.
Operational Performance and Market Trends
Mark Pytosh, Chief Executive Officer of CVR Partners’ general partner, commented on the company's performance, stating,
CVR Partners posted solid operating results for the 2023 third quarter driven by safe, reliable operations with a combined ammonia production rate of 99 percent."He also noted the strong demand for fall ammonia application and rising nitrogen fertilizer prices.
Consolidated Operations
In Q3 2023, CVR Partners’ fertilizer facilities produced a combined 217,000 tons of ammonia, of which 68,000 net tons were available for sale. This is an increase from the 114,000 tons of ammonia produced in Q3 2022, of which 36,000 net tons were available for sale. However, the average realized gate prices for UAN and ammonia showed a reduction over the prior year, down 48 percent to $223 per ton, and 56 percent to $365 per ton, respectively.
Capital Structure and Distributions
On September 26, 2023, CVR Partners amended its Credit Agreement to increase the aggregate principal amount available under the credit facility by an additional $15.0 million to a total of $50.0 million. The company also announced a Q3 2023 cash distribution of $1.55 per common unit, to be paid on November 20, 2023.
Financial Tables Summary
The company's consolidated statement of operations data shows a net income of $731 thousand for Q3 2023, compared to a net loss of $19.8 million for Q3 2022. The total net sales for Q3 2023 were $130.6 million, a decrease from $156.5 million in Q3 2022. The total assets as of September 30, 2023, were $1,019.1 million, while the total debt, including the current portion, was $547.2 million.
Outlook
Despite the challenges, CVR Partners LP (UAN, Financial) expects strong nitrogen fertilizer demand through the end of 2023 and into the spring of 2024, driven by attractive farmer economics. The company will continue to focus on safe and reliable operations to meet this demand.
Explore the complete 8-K earnings release (here) from CVR Partners LP for further details.
