CVR Energy reports $57 M net loss for 2007

CVR Energy Inc., the owner of the Coffeyville nitrogen plant and refinery, reported a net loss of $57 million ($.66 per diluted share) on sales of $3.0 billion for the year ending Dec. 31, 2007, compared to net income of $191.6 million ($2.22 per share) on sales of $3.04 billion.

CVR had a fourth-quarter loss of $15.9 million ($.18 per share) on sales of $1.15 billion, versus the year-ago net income of $20.8 million ($.24 per share) and $708.4 million.

CVR stressed that its operating income provides the best measure of its business because of the assortment of one-time and non-cash items affecting net income. Annual operating income was $204.3 million in 2007, down from 2006’s $281.6 million, while fourth quarter 2007 was up, at $41.8 million versus the year-ago $14.6 million.

Fourth-quarter results reflected the impact of non-cash share-based compensation of pretax $32.2 million, a one-time pretax expense of $10.0 million arising from the termination of management agreements in conjunction with the company’s successful initial public offering, and $7.2 million in net flood-related expenses. In addition, full-year comparisons were adversely affected by a planned major turnaround and expansion at the refinery, as well as significant downtime and costs associated with the flood.

CVR said 2007 was a transitional year, with the company emerging from it as a stronger company. “CVR Energy experienced a remarkable 2007,” said Jack Lipinski, CVR CEO. “We successfully executed a major turnaround and capital expansion program at our Coffeyville, Kan., refinery early in the year; rapidly recovered from a flood during the summer that affected both our petroleum and nitrogen fertilizer businesses; and then executed a successful initial pubic offering of CVR Energy on the New York Stock Exchange in the fall.”

CVR Energy’s nitrogen business reported operating income of $46.6 million on sales of $165.9 million for 2007, up from 2006’s $36.8 million and $162.5 million, respectively. Fourth-quarter nitrogen income was $11.7 million on sales of $50.8 million, versus the year-ago $2.8 million and $34.3 million. CVR Energy nitrogen segment figures differ from those of the newly-filed CVR Partners LP due to intra-company sales. For example, CVR Energy sells petroleum coke to Partners and buys hydrogen from it.

CVR Partners recently filed to sell limited partnership units (GM March 10, p. 1), with 87 percent of the company remaining in the hands of CVR Energy.