CVR Partners LP, which owns a nitrogen plant in Coffeyville, Kan., released its fourth-quarter and year-end results Feb. 22, saying they were the best financial results in company history. CVR Partners is about 70 percent owned by CVR Energy Inc., Sugar Land, Texas, which is in the midst of a takeover attempt by Billionaire investor Carl Icahn (GM Feb. 20, p. 1).
“2011 was an outstanding year operationally and financially,” said Byron Kelley, CVR Partners president and CEO. “The facility’s production reliability rates collectively over the full year were the highest achieved since the plant opened more than 10 years ago, which is a testament to the outstanding efforts of our employees. The high level of reliability combined with the best financial results in the company’s history places us in a solid position moving forward.”
Fourth-quarter net income was $41.2 million ($.56 per diluted common unit) on net sales of $87.6 million, up from a year-ago loss of $6.2 million on sales of $39.4 million. Adjusted EBITDA was $48.4 million, up from the year-ago $7.5 million.
While some fertilizer producers have noted a definite lull in sales in the fourth quarter, particularly for potash, such was not seen for CVR – at least for its major product, UAN. UAN volumes of 184,600 st more than doubled the year-ago 73,800 st, and the plant gate price for the product nearly doubled as well, to $334/st, up from $171/st.
Ammonia sales were down at 29,300 st from 49,400 st; however, prices were up at $606/st from $491/st. Most of CVR’s ammonia is upgraded to UAN, leaving little ammonia to sell on the market.
Full-year net income was up almost $100 million, to $132.4 million ($1.48 per unit) on sales of $302.9 million, compared to 2010’s $33.3 million on sales of $180.5 million. Adjusted EBITDA was $162.6 million, up from the year-ago $52.6 million.
Full-year UAN sales were up at 709,300 st with a plant gate price of $284/st, compared to 2010’s 580,700 st and $179/st, respectively. Ammonia sales were down at 112,800 st from 164,700 st, but prices were up at $579/st from $361/st.
On Jan. 26, 2012, CVR Partners announced its fourth-quarter distribution based on available cash of 58.8 cents per common unit, which was paid Feb. 14, 2012, to unitholders of record on Feb. 7, 2012. The company has distributed approximately $1.57 per common unit since its IPO in March 2011. CVR Partners said it is raising its previous distributions guidance from $1.92 per common unit to $2.00 to $2.05 per common unit for the 12 months ending March 31, 2012.
“We are pleased to increase our guidance, which is reflective of the outstanding performance of the last three quarters of 2011 and our expectations for the 2012 first quarter,” said Kelley. “Although we have seen a number of market factors that have tempered commodity pricing in relation to those late last year, in a historical context we continue to see very good prices for the first half of 2012.
“Combined with an ongoing focus on driving operational reliability and prudent cost control, we anticipate 2012 will be another good year for CVR Partners,” Kelley continued.
For calendar year 2012, the company’s guidance range for distributions is $1.50 to $1.75 per common unit. Included in this guidance is an approximate 25 cent negative impact per common unit associated with the company’s biannual turnaround operation, currently scheduled for the 2012 fourth quarter. Normalized for the turnaround, the distribution range would be approximately $1.75 to $2 per common unit.
“As we look beyond 2012, the macro-fundamentals of our business remain solid,” Kelley said. “Continued population growth, evolution to more protein-rich diets, and increased bio-fuel consumption indicate strong fertilizer d