CVR Partners LP reported second-quarter net income of $59.9 million on net sales of $183.0 million, falling from the year-ago $117.6 million and $244.0 million, respectively. EBITDA was $86.5 million, off from $147.2 million in 2Q 2022.
“CVR Partners achieved solid results for the 2023 second quarter led by strong production, including a combined ammonia production rate of 100% offset by lower fertilizer pricing,” said Mark Pytosh, CEO of CVR Partners’ general partner. “The spring planting season went well with favorable weather and strong demand for nitrogen fertilizer.
“As we enter a new planting season, nitrogen fertilizer prices have fully reset and we have seen strong demand for the second half of 2023,” Pytosh added. “Our focus for the remainder of the year will continue to be on safe, reliable operations and maximizing our free cash generation and cash distribution.”
Despite the lower income, CVR posted a 52% increase in ammonia sales for the second quarter, at 79,000 st compared to the year-ago 52,000 st. Sales of UAN were also higher, firming to 329,000 st from 287,000 st in the prior-year period, a 14.6% increase.
The average selling price for ammonia was $707/st ex-plant, off 40% from the year-ago $1,182/st, while the average selling price of $316/st ex-plant for UAN represented a 43% decline from $555/st in the prior year.
“Our facilities ran well during the second quarter of 2023, and despite five days of downtime due to outages at the third-party air separation plant at Coffeyville, we achieved consolidated ammonia plant utilization of 100%,” Pytosh said. “We also achieved new records for monthly ammonia production and daily ammonia shipments at East Dubuque in the quarter.”
CVR posted combined ammonia production for the second quarter at 219,000 st, of which 70,000 st were available for sale. UAN production was noted at 339,000 st.
“The spring planting season went well with favorable weather and strong demand for nitrogen,” Pytosh said. “Customers have shared with us that their inventory levels were at the lowest they have seen in recent years and will need to be replenished in the coming months.
“Looking ahead, we believe we have seen the recent bottom in nitrogen fertilizer prices,” he added. “(We) expect to see prices increasing into the fall due to strong grain prices and farmer economics.” CVR projected ammonia utilization at 95-100% in the third quarter.
Six-month 2023 net income totaled $161.7 million on net sales of $409.3 million, off from the year-ago $211.2 million and $466.9 million, respectively. EBITDA for January-June stood at $210.8 million, below the $270.6 million reported through the same period of 2022.
CVR announced a cash distribution of $4.14 per common unit in the second quarter, to be paid Aug. 21, 2023, to common unit holders of record as of Aug. 14, 2023.
| Sales (000 st) | 2Q-23 | 2Q-22 |
| Ammonia | 79 | 52 |
| UAN | 329 | 287 |
| Plant Gate Price $/st | 2Q-23 | 2Q-22 |
| Ammonia | 707 | 1,182 |
| UAN | 316 | 555 |
| Production (000 st) | 2Q-23 | 2Q-22 |
| Ammonia – gross | 219 | 193 |
| Ammonia – net | 70 | 50 |
| UAN | 339 | 331 |
| Feedstock | 2Q-23 | 2Q-22 |
| Petroleum Coke ($/st) | 73.91 | 49.91 |
| Natural Gas ($/mmBtu) | 2.35 | 7.34 |