Rentech income weighed down by impairments; gross profits up

Rentech Nitrogen Partners LP reported fourth-quarter 2015 results March 16 that are still being weighed down by writedowns at its Pasadena facility – $26.3 million in the fourth quarter, $160.6 million for the year. As a result, a fourth-quarter loss of $18.8 million ($0.48 per diluted unit) on revenues of $77.4 million was reported, versus the year-ago net income of $7.8 million ($0.20 per unit) and $80.6 million, respectively. Absent impairments, fourth-quarter net income was $7.6 million ($0.20 per unit).

Fourth-quarter gross profits were $17.9 million, up from the year-ago $11.8 million.

Full-year net losses were $101.5 million ($2.62 per unit) on revenues of $340.7 million, compared to 2015’s loss of $1.1 million ($0.03 per unit) and $334.6 million, respectively. Absent the impairments, Rentech had net income of $59.1 million ($1.51 per unit).

Full-year gross profit was $100.8 million, up from 2014’s $60.5 million.

Rentech Nitrogen said improved revenues and gross profits for 2015 were driven by three factors – higher ammonia sales volumes at East Dubuque, lower gas prices (excluding derivatives losses or gains), which averaged $3.71/mmBtu versus $5.00/mmBtu, and improved performance at Pasadena after the 2014 restructure.

Senior Vice President of Sales and Marketing Marc Wallis told analysts March 16 that since Jan. 1 through the present the market has continued to improve. He said East Dubuque’s markets are fairly depleted of both UAN and ammonia and the stage is set for an excellent first-half of the year.

Fourth-quarter East Dubuque net income was $15.8 million on revenues of $45.7 million, up from the year-ago $12.9 million and $47.9 million, respectively. Gross profit was $17.1 million, up from $14 million.

Full-year East Dubuque net income was $90.8 million on revenues of $201.3 million, up from $69.8 million and $196.4 million, respectively. Gross profit was $96.1 million, up from $74.8 million.

While for the fourth-quarter Pasadena reported a loss of $26.7 million due to impairments on revenues of $31.6 million, gross profit was a positive $804,000. The segment had a year-ago net loss of $3.4 million on revenues of $32.6 million, with a gross loss of $2.2 million.

For the full-year, Pasadena reported a gross profit of $4.6 million on revenues of $139.4 million, compared to 2014’s gross loss of $14.3 million and $138.2 million, respectively. Due to impairments, it had a net loss of $159.3 million compared to 2014’s net loss of $47.9 million.