CVR Partners LP reported fourth-quarter net income of $10 million on net sales of $141.6 million, down from the year-ago $95.4 million and $212.2 million, respectively. EBITDA was $37.9 million, down from $122.3 million.
Full-year net income was $172.4 million on sales of $681.5 million, down from 2022’s $286.8 million and $835.6 million, respectively. EBITDA was $281.1 million compared to 2022’s $403.2 million.
“CVR Partners reported solid operating results for the full-year 2023 driven by safe, reliable operations, with a combined ammonia production rate of 100% for the year,” said Mark Pytosh, CEO of CVR Partners’ general partner. “Fall application ammonia demand was one of the strongest we have experienced in recent years.”
Pytosh told analysts that following a reset in nitrogen prices in the summer of 2023, prices increased in the fall, particularly for ammonia, driven by strong demand for application after harvest.
“Looking ahead, we expect nitrogen fertilizer demand to be strong for the spring planting season with attractive farmer economics,” Pytosh added. “In addition, the partnership is proud to have declared cumulative cash distributions of $17.80 per common unit during 2023.”
Pytosh told analysts that current inventories are lower than historical levels due to higher interest rates, with buyers unwilling to carry their cost of capital. He said much buying that normally occurs in December was instead shifted to January and February.
CVR is putting the company’s 2024 ammonia utilization rate at 86-91%, which reflects planned downtime at Coffeyville, Kan. The plant has been having converter issues and is currently down for a catalyst change, but is expected to be back up in early March.
Pytosh confirmed that a union strike continues at the company’s East Dubuque, Ill., nitrogen plant (GM Oct. 20, 2023), but he said the company has operated the plant in a safe and reliable manner since the strike began, with utilization of 94% in ammonia production in the fourth quarter. Pytosh said the only significant downtime in the quarter occurred in early October before the strike.
“We had record monthly production in December and shipped near-record volumes of ammonia in November for the fall application,” he said. “While it’s hard to predict the future, we believe we can continue to operate the plant safely and reliably at high utilization rates. We sincerely appreciate the hard work of our people at East Dubuque in supporting facilities to keep the plant running and meeting the needs of our customers.”
Pytosh said CVR is conducting engineering studies on the potential to use natural gas as an alternative feedstock to petcoke at its Coffeyville facility. He expects to present a decision to the Board of Directors by the end of the year. While the plant could conceivably operate on 100% natural gas or petcoke, the thinking is it would use both fuels, continuing to use petcoke sourced from sister company CVR Energy, but eliminating any third-party petcoke contracts.
He said CVR continues to evaluate brownfield development projects at both production facilities that could be attractive targeted capacity increases to the existing footprint.
| Sales (000 st) | 4Q-23 | 4Q-22 | 2023 | 2022 |
| Ammonia | 98 | 77 | 281 | 195 |
| UAN | 320 | 261 | 1,395 | 1,114 |
| Plant Gate Price $/st | 4Q-23 | 4Q-22 | 2023 | 2022 |
| Ammonia | 461 | 967 | 573 | 1,024 |
| UAN | 241 | 455 | 309 | 486 |
| Production (000 st) | 4Q-23 | 4Q-22 | 2023 | 2022 |
| Ammonia – gross | 205 | 210 | 864 | 703 |
| Ammonia – net | 75 | 75 | 270 | 213 |
| UAN | 306 | 308 | 1,369 | 1,140 |
| Feedstock* | 4Q-23 | 4Q-22 | 2023 | 2022 |
| Petroleum Coke | 77.09 | 53.36 | 78.14 | 52.88 |
| Natural Gas ($/mmBtu) | 2.95 | 6.68 | 3.42 | 6.66 |
*Used in production