Rentech Nitrogen 1Q income soars

Los Angeles — Rentech Nitrogen Partners LP, which owns a nitrogen plant in East Dubuque, Ill., reported net income of $19.4 million ($0.51 per diluted unit) on sales of $38.5 million for the first quarter ending March 31, 2012, compared to the year-ago income of $3.5 million on sales of $23.9 million. Operating income was $19.4 million, up from $9 million. EBITDA was $21.9 million, up from $10.5 million. Rentech Nitrogen GP LLC CEO D. Hunt Ramsbottom said the results exceeded expectations. “An early spring application window, strong nitrogen demand, strong plant production and on-stream time, and low natural gas prices contributed to the exceptional results we
reported today. During the quarter, we operated the plant at maximum capacity to take advantage of the strong market dynamics. We declared our first cash distribution of $1.06 per unit, which is better than anticipated. Based on current market conditions, we expect strong margins this year, which should enable us to achieve total cash distributions for the year in the range of $2.86 per unit.” The company projects 12-month EBITDA of about $120 million. During the quarter, Rentech delivered 30,000 st of ammonia at an average delivered price of $673/st, up from the year ago 20,000 st ($609/st). For UAN, it delivered 34,000 ($327/ st) versus the year-ago 30,000 st ($206/st). The company delivered 13,000 st of other nitrogens, up from the year-ago 12,000 st. Natural gas costs used in production were down at $4.21/mmBtu from $4.84/mmBtu. Overall, ammonia production was up, at 78,000 st from 75,000 st. The company upgrades much of its ammonia into UAN and other products, with the remainder available for sale. For 2012, Rentech expects to deliver 144,000 st of ammonia. As of March 31, 38 percent, or 55,000 st, of this had been locked in at $693/st. It expects to deliver 290,000 st of UAN, and as of March 31, 34 percent, or 99,000 st, of this was locked in at $361/st. It expects to buy 10.5 million mmBtus of gas, and as of March 31, 68 percent, or 7.1 million mmBtus, were bought at $3.78/mmBtu.