CVR 3Q Losses Grow, Production Remains Strong

CVR Partners LP, Sugar Land, Texas, on Oct. 23 reported a third-quarter net loss of $23 million ($0.20 per common unit) on net sales of $88.6 million, compared to the year-ago loss of $13.1 million ($0.12 per unit) and $79.9 million, respectively. Adjusted EBITDA was $17.9 million, down from $18.6 million.

“CVR Partners had strong production for the 2019 third quarter,” said Mark Pytosh, CEO of CVR’s general partner. “Coffeyville and the East Dubuque plant leading up to its scheduled turnaround achieved 98 percent ammonia utilization rates during the quarter. This production, coupled with higher UAN sales volumes and stronger UAN and ammonia product pricing over the prior year period, led to solid financial results. We are pleased to announce a 7 cents per unit cash distribution for the quarter.”

“Looking ahead, East Dubuque successfully completed its planned turnaround in October and is now coming back up to full production,” he added. He told analysts the turnaround was a few days longer than expected due to completing more repairs on the reformer piping and vessels.

“We also spent $2.7 million more than planned primarily to further improve long-term reliability, as we made a number of improvements to the primary and secondary reformers,” said Pytosh. He reiterated that future turnarounds would target projects that are intended to improve reliability and debottleneck in incremental ways to gain added production for low capital investment.

“While we await the completion of the fall harvest and the beginning of the fall ammonia application, crop prices recently have risen and should lead to improved planted acres for the spring planting season,” he added. Pytosh told analysts that fertilizer inventories were comfortable for retailers and distributors for this time of year, but he expects another wave of buying to fulfill nitrogen needs. One positive sign, he said, was a drier October than last year. “It’s been a little drier, a little colder, and harvest has picked up momentum and we’re starting to see pockets of ammonia application already, which is early.”

CVR reported a nine-month loss of $10.1 million ($0.09 per share) on net sales of $318.1 million, an improvement over the year-ago loss of $48.7 million ($0.43 per share) and $253 million, respectively. Adjusted EBITDA was $103.7 million, up from the year-ago $57.7 million.