CVR Partners LP, Sugar Land, Texas, reported second-quarter net income of $7 million ($0.66 per diluted limited partnership unit) on net sales of $138 million, compared to the year-ago loss of $41.6 million ($3.68 per unit) and $105.1 million, respectively. Adjusted EBITDA was $51.5 million, up from the year-ago $38.6 million.
“CVR Partners experienced a solid 2021 second quarter, led by a combined ammonia utilization rate of 98 percent,” said Mark Pytosh, CEO of CVR Partners’ general partner. “Further contributing to the quarter were ideal spring planting conditions and strong shipments of nitrogen fertilizer at both facilities.
“So far in the third quarter, farm economics remain robust, with grain prices nearing a 10-year high and demand for all crop inputs, including nitrogen fertilizer, remaining strong,” he added. “Nitrogen fertilizer pricing also continues to remain firm due to supply constraints resulting from Winter Storm Uri-related production outages and the planned major plant turnarounds scheduled across the industry for the second half of the year.”
Pytosh told analysts that due to COVID-19, many North American nitrogen producers delayed turnarounds in 2020 to 2021 and he believes many of these will begin in the third quarter. As a result, he expects North American nitrogen production for second-half 2021 to be below second-half 2020.
As for the market, Pytosh said, “As compared to the past five years, we did not see the normal seasonal decline in nitrogen fertilizer prices into the summer. Sales for summer ammonia fill, fall prepay and UAN fill were completed in late June and July at price levels comparable to spring spot pricing. We have a solid order book for both UAN and ammonia going into the fall. And our sales effort, we factored in our planned fall turnaround at the Coffeyville plant that is expected to start in early fourth quarter.”
Pytosh outlined other factors that the company is monitoring: possible carbon capture and sequestration at both of its plants; certifying both plants as blue ammonia production; any multi-year change to the UAN market due to the current antidumping and countervailing duty case; and expanded grain and soy consumption for renewable fuels.
CVR also announced a second-quarter 2021 cash distribution of $1.72 per common unit, which is the first distribution paid to unitholders since the fourth quarter of 2019.
CVR reported a six-month net loss of $18.4 million ($1.72 per unit) on net sales of $199 million, compared to the year-ago loss of $62.3 million ($5.51 per unit) and $180.2 million, respectively. Adjusted EBITDA was $56.1 million, up from $49.3 million.
| Sales (000 st) | 2Q-21 | 2Q-20 | YTD-21 | YTD-20 |
| Ammonia | 80 | 111 | 112 | 164 |
| UAN | 370 | 337 | 609 | 621 |
| Plant Gate Price $/st | 2Q-21 | 2Q-20 | YTD-21 | YTD-20 |
| Ammonia | 403 | 332 | 373 | 310 |
| UAN | 237 | 165 | 206 | 166 |
| Productions (000 st) | 2Q-21 | 2Q-20 | YTD-21 | YTD-20 |
| Ammonia – gross | 217 | 216 | 404 | 417 |
| Ammonia – net | 70 | 79 | 140 | 157 |
| UAN | 334 | 321 | 606 | 638 |
| Feedstock | 2Q-21 | 2Q-20 | YTD-21 | YTD-20 |
| Petroleum Coke $/st | 36.69 | 31.13 | 39.73 | 37.59 |
| Natural Gas ($/mmBtu) | 3.04 | 1.94 | 3.07 | 2.18 |