CVR Partners (UAN) Q2 2024 earnings summary

Executive summary

• Net sales for Q2 2024 were $133 million, down from $183 million in Q2 2023, with net income of $26 million and EBITDA of $54 million, reflecting lower product prices and volumes due to reduced natural gas prices and a planned Coffeyville outage.

• The Board declared a Q2 2024 distribution of $1.90 per common unit, payable August 19, 2024, to unitholders of record as of August 12.

• Ammonia plant utilization reached 102%, with 221,000 tons produced and 337,000 tons of UAN upgraded, supported by strong production and demand.

• Spring planting season saw weather interruptions but resulted in higher-than-expected planted acreage and robust nitrogen fertilizer demand.

Financial highlights

• Operating income for Q2 2024 was $34 million, down from $67 million in Q2 2023.

• Direct operating expenses for Q2 2024 were $47 million, down year-over-year due to lower natural gas and electricity costs.

• UAN sales volumes were steady year-over-year, while ammonia sales volumes were lower due to earlier application in Q1.

• Ammonia prices fell 26% and UAN prices fell 15% compared to Q2 2023.

• Cash and cash equivalents as of June 30, 2024, were $48 million; total liquidity including the ABL Credit Facility was $98 million.

Outlook and guidance

• Ammonia utilization rate for Q3 2024 expected between 95% and 100%.

• Direct operating expenses for Q3 2024 projected at $53–$58 million, with capital spending of $10–$15 million.

• Total 2024 capital spending estimated at $40–$43 million, with $29–$31 million for maintenance.

• Management anticipates continued strong nitrogen fertilizer demand and higher prices for the remainder of 2024.

• The next planned turnarounds are scheduled for 2025 at Coffeyville and 2026 at East Dubuque.