AdvanSix, Parsippany, N.J., reported second-quarter net income of $25.8 million ($0.83 per diluted share) on sales of $361.4 million, up from the year-ago $15 million ($0.49 per share) and $308.4 million, respectively. EBITDA was up 60 percent, to $54.6 million from the year-ago $34.1 million.
“AdvanSix had a terrific second quarter, capping off a strong first half of 2017,” said CEO Erin Kane. “The performance this quarter continued to be supported by higher production output across our key manufacturing sites and a favorable supply and demand environment. Our proactive mechanical integrity program and reliability improvements are driving higher returns, enabling a 3 percent volume increase in the quarter. We successfully completed our spring turnarounds while the entire organization maintained its relentless focus on safety and efficiency.”
The company said its plants are outperforming historical production rates and achieved a 7 percent improvement on a year-to-date basis.
While market-based pricing was favorable by 4 percent, improved prices for nylon, caprolactam, and chemical intermediates partially offset a modest decline in ammonium sulfate prices. AS sales represented only 21 percent of total AdvanSix second-quarter sales, down from the year-ago 25 percent.
“Our prices for ammonium sulfate have stabilized sequentially, but we expect to see the normal seasonal pricing decline in the back half of the year,” Senior Vice President and CFO Michael Preston told analysts Aug. 10. “Although we continue to face a challenging end market environment overall, we remain focused on delivering all the value proposition of our sulfur nutrition for our customers globally.”
“Our volumes are expected to remain relatively steady in the second-half,” he added. “However, we expect to have a higher amount of products sold to our export markets in the second-half, particularly in Latin America, given the timing of planting seasons relative to the higher domestic granular product we sold in the first half.”
Going forward, the company expects challenging agriculture fundamentals through the 2017-18 plant season, with cautious buyer behavior ahead of new season fill. AS prices are expected to be down for full-year 2017 from 2016.
AdvanSix noted that global urea supply additions continue to pressure nitrogen pricing, and demand has been impacted by low global grain pricing.
AdvanSix has a planned turnaround at the Hopewell, Va., facility in the fourth quarter that will have a $20 million pre-tax impact. The company said the plant will continue production during the turnaround, though at lower rates.
Six-month net income was $53 million ($1.71 per share) on sales of $738.1 million, up from $42.4 million ($1.39 per share) and $608.2 million, respectively. EBITDA was $111.7 million, up from $87.4 million.