Oklahoma City — Unplanned production problems at three of its nitrogen plants, two of which occurred in the fourth quarter, helped spur a 52 percent drop in LSB Industries Inc.’s Chemical segment operating income in the fourth quarter ending Dec. 31, 2012. Income dropped to $15.1 million on sales of $105.3 million, compared to the year-ago $37.6 million on sales of $142 million. Fourth-quarter income was reduced by $29 million due to the problems at the three plants. LSB said it lost $12 million due to the mid-November outage at its Pryor, Okla., facility. It is in the process of putting a new ammonia converter in at Pryor, and expects the facility to resume and sustain production in March. A mid-November pipe rupture that damaged an ammonia heat exchanger resulted in problems at the Cherokee, Ala., plant and LSB said the incident cost it $13 million during the quarter due to lost production and the higher cost of purchased ammonia. LSB expects Cherokee repairs to be completed in May. An explosion at the El Dorado plant cost LSB some $4 million during the quarter, and will cost $1-$2 million per month until a new nitric acid plant is built. Its completion is expected in first quarter 2015. The cumulative effect of the incidents for the year was $83 million. LSB said it has begun a concerted program to attempt to improve the reliability and mechanical integrity of its chemical facilities. Full-year Chemical income was $82.1 million on sales of $477.8 million, compared to 2011’s $116.6 million on sales of $511.8 million. Company-wide, LSB reported fourth-quarter net income applicable to common stock of $11.6 million ($0.49 per diluted share) on sales of $117.1 million, versus the year-ago $28 million ($1.19 per share) on sales of $215.4 million. Full-year net income was $58.3 million ($2.49 per share) on sales of $759 million, versus 2011’s $83.5 million ($3.58 per share) on sales of $805.2 million.
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