CVR Energy Inc. reported that nitrogen fertilizer operations had operating income of $3 million on sales of $38.3 million for the first quarter ending March 31, 2010, compared to the year-ago income of $29.3 million on sales of $67.8 million.
CVR President, CEO, and Chairman John “Jack” Lipinski told analysts that the nitrogen results were based on forward book of orders that were taken last summer when prices were lower. He said prices reached their lows last June. “Since we carry a fairly substantial book of forward orders, changes in current prices take time to roll though our financials.” Lipinski said current nitrogen sales are strong and higher prices have been realized on orders taken this year, which will show up on the books next quarter. He said inventories are at seasonal lows, and orders are slightly above historical levels.
CVR put current net-backs to their plant at over $300/st for ammonia and $220/st for UAN. Lipinski added that its biggest markets are Nebraska, Kansas, and northern Texas, but that it moves material to 26-28 states, Mexico, and Canada. For the first quarter, average realized plant gate prices for ammonia and UAN were down significantly to $282/st and $167/st, respectively, versus the year-ago $373/st and $316/st.
CVR sold 31,200 st of ammonia and 155,800 st of UAN in the first quarter, versus the year-ago 48,000 st and 143,000 st, respectively. The nitrogen unit consumed 117,700 st of petroleum coke at an average price of $14/st, versus the year-ago 125,300 st at $35/st. By comparison, CVR said comparable NYMEX gas prices for the quarter were $4.99/mmBtu, versus the year-ago $4.47/mmBtu.
CVR said 105,000 st of ammonia was produced during the first quarter, of which 38,200 st was available for sale, with the rest upgraded to 163,800 st of UAN. This compares with the year-ago 108,000 st, 38,800 st, and 169,700 st, respectively.
The gasification rate for the quarter was 96 percent, ammonia 94.2 percent, and UAN 90.6 percent, compared to the year-ago 100 percent, 100 percent, and 96 percent, respectively.
Company-wide, CVR had a first-quarter net loss of $12.4 million ($.14 per diluted share) on sales of $894.5 million, versus the year-ago net income of $30.7 million ($.36 per diluted share) on sales of $609.4 million.
The refining business reported a first-quarter operating loss of $7.1 million on sales of $856.7 million, compared to year-ago income of $64.7 million on sales of $545.3 million.