Rentech 2Q income soars

Los Angeles — Rentech Nitrogen Partners LP, which owns a nitrogen plant in East Dubuque, Ill., reported net income of $41.2 million ($1.08 per diluted common unit) on sales of $70.6 million for the second quarter ending June 30, 2012, compared to the year-ago $13.7 million on sales of $74.4 million. EBITDA was $44.9 million, up from $39.3 million. The prior year period, however, did include a $9.2 million loss on debt extinguishment. Second-quarter sales were down, as many spring sales occurred in the first quarter rather than the second. Although the drought also impacted UAN consumption, this was largely offset by higher product prices, with ammonia and UAN up 9 and 21 percent, respectively, compared to the year-ago quarter. Delivered ammonia volumes were 40,000 st at an average price of $695/st, compared to the year-ago 43,000 st ($638/st). UAN volumes were 92,000 st ($378/st), down from 129,000 st ($312/st). Six-month net income was $60.6 million ($1.58 per unit) on sales of $109.1 million, compared to the year-ago $17.3 million on sales of $98.3 million. EBITDA was $66.8 million, up from $49.8 million. Ammonia volumes were 70,000 ($686/st), up from 63,000 st ($628/st), while UAN was 126,000 ($365/st), down from 159,000 st ($292/st). Going forward, Rentech believes the drought will continue to have a favorable impact on nitrogen prices. It has increased guidance for the year ending Dec. 31, 2012, stating cash available for distribution to be in excess of $126 million, or $3.30 per unit, and EBITDA in excess of $130 million. This compares to earlier EBITDA guidance of $120 million, with cash for distribution of $109 million, or $2.86 per unit. Rentech projects 2012 ammonia sales at 143,000 st, with 111,000 st already sold at an average price of $659/st, and UAN for 2012 at 293,000 st, with 291,000 st already sold at $326/st. Rentech says 67 percent of its gas has been bought for the year at $3.64/mmBtu. In other news, Rentech recently announced that it has completed the diesel exhaust fluid (DEF) system portion of the previously announced urea/DEF expansion project at its nitrogen facility. It was completed ahead of schedule, and it included the installation of mixing, storage, and load-out equipment for DEF production. The second phase of the project, to increase urea production capacity by 13 percent, or 17,500 tons annually, which will be used for the production of DEF, is on schedule to be completed by the end of this year.