All Posts from November 2, 2016

CF reports 3Q loss; provides Port Neal update

CF Industries Holdings Inc. reported a third-quarter net loss attributable to common stockholders of $30 million ($0.13 per diluted share) on net sales of $680 million compared to the year-ago net income of $90 million ($0.39 per share) and $928 million, respectively.

CF said the pricing for nitrogen products in the U.S. Gulf declined during the third quarter, often trading below international parity, as seasonal decreases in agricultural demand were compounded by delayed customer purchasing activity, resulting in multi-year lows in product prices for all major products.

“CF remains well-positioned with enduring structural advantages despite the challenging market environment,” said Tony Will, CF president and CEO. “The versatility of our unmatched production and distribution system allows us to meet evolving customer needs, and our imminent capacity increase continues to support our cash generation capability. With these elements in place, CF remains the best-positioned company to benefit from recovery in the sector.”

CF said conditions have come to weigh on Chinese production and urea exports from that country are down, with this affecting prices. It said while the average U.S. Gulf urea barge price was approximately $180 st for the third quarter, it approached $200 at the end of the quarter and has steadily increased into the fourth quarter.

CF says the agricultural outlook for North America suggests continued profitability at the farm level for corn and soybeans despite less profitable acreage in the Western Cornbelt and Southeast. Accordingly, planted acres for corn are expected to decline to approximately 88 million acres in fertilizer year 2017 compared to approximately 94 million acres planted in fertilizer year 2016.

CF gave an update on its Port Neal, Iowa plants, saying they are in the process of starting up. Gas has been introduced into the ammonia plant and production is expected soon. The urea plant commission will parallel the ammonia plant and the granulation unit was successfully tested in September.

Going forward, CF said accelerated depreciation on capacity expansion projects drive an estimated tax refund of approximately $800 million of cash in 2017 from carrybacks of current year tax losses to prior tax years.

Air Liquide selected for new Grannus plant

Grannus LLC, Tucson, announced Nov. 2, that Air Liquide Global E&C Solutions, the engineering and construction business of Air Liquide group, will license technology and provide engineering services for the production of hydrogen at its ammonia plant to be built in Kern County, Calif. (GM Oct. 14, p. 1). The plant is being built for the use of California Ammonia Co. (Calamco).

Air Liquide Global E&C Solutions will license oxygen-based Lurgi GasPOX technology and associated gas clean-up technologies, including a pressure swing adsorption unit (PSA) to produce high purity hydrogen required for the ammonia process. In addition, Air Liquide Global E&C solutions will prepare process design packages (PDPs) for the natural gas to hydrogen process.

The Grannus plant, due up in 2019, will produce 250 st/d of ammonia, which the company says represents approximately 40 percent of California’s agricultural ammonia consumption.

Intrepid loss grows on lower prices

Intrepid Potash Inc. reported a third-quarter net loss of $18.2 million ($0.24 per diluted share) on sales of $43.6 million compared to the year-ago loss of $8.1 million ($0.11 per share) and $53.6 million.

The company said a volume increase of 34 percent was not enough to offset decreased potash prices.

On Oct. 31, 2016, Intrepid announced the completion of its debt negotiations, resulting in amendments to the company’s senior notes as well as a new revolving credit facility which provides up to $35 million in borrowing capacity, subject to a borrowing base limitation.

“The transition of our business model to a lower-cost solar potash and specialty Trio^® producer accelerated this quarter with the idling of West in early July and the completion of commissioning at East,” said Bob Jornayvaz, Intrepid’s executive chairman, president and CEO. “During the third quarter, we reached our goal of achieving an annualized Trio^® production run rate of double our 2015 production. We continue to focus on expanding our global presence for Trio^®, which we believe is a compelling product for chloride-sensitive crops. We are starting to see a more supportive selling environment for potash as pricing has firmed. Moving into 2017, we anticipate seeing some benefit to our potash gross margin as our lower-cost solar facility production becomes a greater proportion of our potash sales.”