CF Industries Holdings Inc., Deerfield, Ill., tripled fourth-quarter adjusted EBITDA to $1.26 billion, up from the year-ago $338 million, beating the average analyst projections of $1.2 billion from the Bloomberg Consensus. Net income attributable to CF was $705 million ($3.27 per diluted share), up from $87 million ($0.40 per share), also besting the analyst estimates. Fourth-quarter net sales were $2.54 billion, up from $$1.1 billion.
“The CF Industries team delivered outstanding results in 2021 as strong global nitrogen demand, lower global operating rates, and favorable energy spreads drove company-record free cash generation,” said Tony Will, CF President and CEO.
“We expect global nitrogen fundamentals to remain positive, underpinned by the need to replenish global grains stocks, increased economic activity and global energy dynamics. We are well-positioned to continue to drive strong cash generation, enabling us to invest in our clean energy initiatives, return substantial capital to shareholders, and achieve our goal of $3 billion of gross debt by 2023,” continued Will.
CF sold 4.98 million st of product in the fourth quarter, down from the year-ago 5.48 million. Full-year sales were 18.5 million st, down from 2020’s 20.3 million st. Explaining the decline, CF cited the highest level of maintenance activity in the company’s history, much of which had been delayed from the first year of COVID-19.
Production was also down due to curtailments at the U.K. plants due to high natural gas costs and two significant weather-related (Winter Storm Uri and Hurricane Ida) production outages in the U.S. However, average selling prices for the year were higher than 2020 across all segments.
For 2022, CF expects gross ammonia production to return to normal, at 9.5-10 million st compared to 2021’s 9.3 million st.
CF told analysts that it would favor premium-priced UAN production over urea in 2022, and said urea production would be dramatically reduced. UAN had been CF’s poorest performer in fourth-quarter 2020, with it posting a gross margin of a negative $2 million. However, the gross margin was $372 million in fourth-quarter 2021.
CF projects U.S. corn acreage at 91-93 million acres in 2022. CF told analysts that it would take at least two more growing seasons to fully replenish grain stocks.
It believes global nitrogen supplies are low after a year of strong demand and lower nitrogen production. It believes India still needs urea, and said that forward European gas curves remain above historical norms, challenging producer profitability and putting a high floor under nitrogen prices that will benefit low-cost North American producers.
The company noted that Chinese urea exports are expected to be limited through at least the first half, and noted that Russia, Turkey, and Egypt have limited their exports.
Full-year adjusted EBITDA was $2.74 billion, up from the year-ago $1.35 billion, also besting the analysts; however, for net income CF was just barely below analyst estimates, at $917 million ($4.24 per share) compared to $922.6 million. The year-ago figure was $317 million ($1.47 per share).
On Feb. 2, CF declared a $0.30 per share dividend on its common stock. The dividend will be payable on Feb. 28, 2022, to stockholders of record as of Feb. 15, 2022.
| Production (000 st) | 4Q-21 | 4Q-20 | 2021 | 2020 |
| Ammonia | 2,452 | 2,732 | 9,349 | 10,353 |
| Gran Urea | 984 | 1,361 | 4,123 | 5,001 |
| UAN 32 | 2,135 | 1,798 | 6,763 | 6,677 |
| AN | 390 | 583 | 1,646 | 2,115 |
| Ammonia | 4Q-21 | 4Q-20 | 2021 | 2020 |
| Net Sales ($/M) | 778 | 298 | 1,787 | 1,020 |
| Gross Margin ($/M) | 291 | 57 | 625 | 170 |
| Sales Volumes (000 st) | 1,180 | 1,092 | 3,589 | 3,767 |
| Avg Selling Price ($/st) | 659 | 273 | 498 | 271 |
| Gross Margin per st | 247 | 52 | 174 | 45 |
| Gas Costs ($/mmBtu) | 6.00 | 2.60 | 4.21 | 2.24 |
| Gran Urea | 4Q-21 | 4Q-20 | 2021 | 2020 |
| Net Sales ($/M) | 662 | 333 | 1,880 | 1,248 |
| Gross Margin ($/M) | 375 | 98 | 888 | 401 |
| Sales Volumes (000 st) | 1,018 | 1,346 | 4,290 | 5,148 |
| Avg Selling Price ($/st) | 650 | 247 | 438 | 242 |
| Gross Margin per st | 368 | 73 | 207 | 78 |
| UAN | 4Q-21 | 4Q-20 | 2021 | 2020 |
| Net Sales ($/M) | 732 | 272 | 1,788 | 1,063 |
| Gross Margin ($/M) | 372 | (2) | 669 | 114 |
| Sales Volumes (000 st) | 1,838 | 1,888 | 6,584 | 6,843 |
| Avg Selling Price ($/st) | 398 | 144 | 272 | 155 |
| Gross Margin per st | 202 | (1) | 102 | 17 |
| AN | 4Q-21 | 4Q-20 | 2021 | 2020 |
| Net Sales ($/M) | 151 | 112 | 510 | 455 |
| Gross Margin ($/M) | 13 | 12 | 35 | 65 |
| Sales Volumes (000 st) | 374 | 545 | 1,720 | 2,216 |
| Avg Selling Price ($/st) | 404 | 206 | 297 | 205 |
| Gross Margin per st | 35 | 22 | 20 | 29 |
| Other | 4Q-21 | 4Q-20 | 2021 | 2020 |
| Net Sales ($/M) | 217 | 87 | 573 | 338 |
| Gross Margin ($/M) | 104 | 15 | 170 | 51 |
| Sales Volumes (000 st) | 569 | 608 | 2,318 | 2,322 |
| Avg Selling Price ($/st) | 381 | 143 | 247 | 146 |
| Gross Margin per st | 183 | 25 | 73 | 22 |