CVR Shrinks 3Q Loss; Improved Operations, Better Pricing Reported

CVR Partners LP, Sugar Land, Texas, reported a third-quarter net loss of $13.1 million ($0.12 per unit) on net sales of $79.9 million, compared to a year-ago net loss of $31.6 million ($0.28 per unit) on net sales of $69.4 million. Adjusted EBITDA was up at $18.6 million from the year-ago $5 million.

“We are pleased to report strong operating performance and improved fertilizer netbacks at both our Coffeyville, Kan., and East Dubuque, Ill., fertilizer facilities during the 2018 third quarter,” said Mark Pytosh, CVR CEO. “Market conditions have continued to improve since summer, and we are seeing strong global demand for nitrogen fertilizer. In addition, product pricing for the late fall of 2018 has increased by approximately 25 percent from the summer fill season, and we’re seeing continued pricing strength into the first quarter of 2019.”

CVR Partners said it will not pay a cash distribution for the 2018 third quarter, though it said in its teleconference that improving market conditions may give it the opportunity to return to making cash distribution in the future.

The company said it intentionally sold less product into the fill program this summer, as did some of its competitors. As a result, it said it has continued to see steady demand throughout the fall, as well as rising prices. It said prices recognized in the fourth quarter will be a blend of fill prices and higher prices. Pytosh said customers are buying more ratably than in the past because they can pull from domestic plants and not worry so much about any time lag from imports. The company said it still has product to sell in the fourth quarter.

As for the coming season, CVR expects to see good demand from its East Dubuque plant due to a switch from soybeans to corn. It also expects to have more ammonia available for the fall application season, compared to the year-ago season. CVR said the Coffeyville plant should benefit from more acres going into increased wheat plantings.

Despite the improved third-quarter, CVR posted a larger loss for the first nine-months at $48.6 million ($0.43 per unit) on sales of $253 million, compared to the year-ago loss of $45.4 million ($0.40 per unit) and $252.6 million, respectively. Adjusted EBITDA was about level at a positive $57.7 million, compared to the year-ago $58.1 million.