CF Industries Holdings Inc. reported a drop in first-quarter net earnings, to $194 million on net sales of $1.47 billion, down from the year-ago $560 million and $2.01 billion, respectively. Adjusted EBITDA was off at $459 million from $866 million.
CF cited severe cold weather and other maintenance events resulting in approximately $75 million higher maintenance expenses during the quarter.
“The CF Industries team faced a challenging quarter as severe cold in January and some unplanned maintenance disrupted our network significantly. However, our team did an outstanding job restoring our operations to normal utilization rates,” said President and CEO Tony Will.
“Longer-term, we remain confident in our ability to drive strong cash generation due to a global energy cost structure favorable to our North American-based production network and continued progress on our low-carbon clean energy initiatives,” Will said. “As a result, we believe we will be able to continue to create significant shareholder value from disciplined investments in growth opportunities and returning substantial capital to shareholders.”
CF reported first-quarter gross ammonia production of 2.1 million st, down from the year-ago 2.4 million st due to the impact of a significant planned turnaround event in the quarter, severe weather in January, and other unplanned maintenance. This was partially offset by production from the Waggaman, La., ammonia production facility (GM Dec. 1, 2023), which was not a part of the CF’s year-ago network.
Going forward, despite the first-quarter ammonia disruptions, CF expects full-year gross ammonia production of about 9.8 million st, up from 2023’s 9.5 million st. CF said first-half North American nitrogen demand should be positive due to the 91 million acres of corn expected to be planted in the US.
It expects urea supply availability and lower global urea prices to drive a 3% increase in Brazil’s urea consumption, to 8 million mt in 2024. It also expects Brazil urea imports to be 7.8-8.0 million mt due to limited domestic production.
CF expects Indian demand to remain strong due to a recovery in rice production and improved weather conditions. However, CF expects imports of urea to India in 2024 to be in the range of 5.5-6.5 million mt as recently revitalized plants and new facilities in the country operate at higher rates.
As of March, CF said some 35% of Europe’s ammonia and 25% of its urea production was in shutdown/curtailment and it believes operating rates will remain below historical averages over the long-term due to the region’s status as the global marginal producer.
CF thinks China’s urea exports will resume midyear following spring applications, with projected exports of 4 million mt. It said Trinidad’s ammonia production continues to run at 1 million mt below the 2018-2020 average due to higher natural gas prices and availability. CF expects Russian urea exports to increase in 2024 due to new production, but exports will remain restrained due to the closure of the Russia-Odessa pipeline.
| Production (000 st) | 1Q-24 | 1Q-23 |
| Ammonia | 2,148 | 2,359 |
| Gran Urea | 959 | 1,211 |
| UAN 32 | 1,631 | 1,598 |
| AN | 341 | 388 |
| Ammonia | 1Q-24 | 1Q-23 |
| Net Sales ($/M) | 402 | 424 |
| Gross Margin ($/M) | 65 | 144 |
| Sales Volumes (000 st) | 918 | 652 |
| Avg Selling Price ($/st) | 438 | 650 |
| Gas Costs ($/mmBtu) | 3.19 | 6.62 |
| Gran Urea | 1Q-24 | 1Q-23 |
| Net Sales ($/M) | 407 | 611 |
| Gross Margin ($/M) | 154 | 284 |
| Sales Volumes (000 st) | 1,092 | 1,323 |
| Avg Selling Price ($/st) | 373 | 462 |
| UAN | 1Q-24 | 1Q-23 |
| Net Sales ($/M) | 425 | 667 |
| Gross Margin ($/M) | 143 | 321 |
| Sales Volumes (000 st) | 1,611 | 1,662 |
| Avg Selling Price ($/st) | 264 | 401 |
| AN | 1Q-24 | 1Q-23 |
| Net Sales ($/M) | 114 | 159 |
| Gross Margin ($/M) | 9 | 55 |
| Sales Volumes (000 st) | 390 | 374 |
| Avg Selling Price ($/st) | 292 | 425 |
| Other | 1Q-24 | 1Q-23 |
| Net Sales ($/M) | 122 | 151 |
| Gross Margin ($/M) | 38 | 59 |
| Sales Volumes (000 st) | 513 | 524 |
| Avg Selling Price ($/st) | 238 | 288 |