All Posts from October 29, 2015

Yara acquires Pilbara assets from Apache – Alert

Yara International ASA said Oct. 29 that it has acquired 100 percent of the shares in Apache Fertilisers Pty Ltd., which holds Apache’s 49 percent ownership position in Yara Pilbara Holdings Pty Ltd. (YPHL), for US$391 million.

YPHL owns 100 percent of the Yara Pilbara Fertilisers Pty Ltd (YPF). YPF in turn owns the Yara Pilbara ammonia plant, which has a production capacity of approximately 850,000 mt/y. In 2014 the Yara Pilbara ammonia plant delivered an EBITDA of US$218 million. The natural gas contract for the ammonia plant contains a price step-up effective mid-2016.

YPHL also owns 20.4 percent of Yara Pilbara Nitrates Pty Ltd. (YPN). YPN is constructing a technical ammonium nitrate (TAN) plant with a production capacity of 330,000 mt/y, with completion scheduled for early 2016.

"We are pleased to secure full ownership of the Pilbara ammonia plant, which is the largest and most modern ammonia plant in Yara’s portfolio," said Svein Tore Holsether, Yara president and CEO.

"The Pilbara assets are already operated by Yara, and therefore require limited efforts to fully integrate. The investment will also yield synergies within governance and tax structure," said Holsether.

The transaction has been signed and closed, and required approvals by relevant authorities have been obtained.

Downtime puts CVR in loss column – Alert

CVR Partners LP reported a third-quarter loss of $13.5 million ($0.18 per diluted share) on sales of $49.3 million compared to the year-ago net income of $12.7 million ($0.17 per share) and $66.7 million, respectively. The company cited both a planned turnaround as well as unplanned outages at its air separation unit which resulted in approximately 18 days of additional downtime.

PotashCorp cuts production; adjusts guidance – Alert

Potash Corp. of Saskatchewan Inc. announced production cuts Oct. 29 as it reported lower third-quarter earnings. Third-quarter net income was $282 million ($0.34 per diluted share) on sales of $1.53 billion, down from the year-ago $317 million ($0.38 per share) and $1.64 billion, respectively.

“Broader emerging market concerns have weighed on customer sentiment, contributing to a weaker fertilizer environment in the second half of 2015," said PotashCorp President and CEO Jochen Tilk. "In response, we are moving forward the permanent closure date of our Penobsquis, New Brunswick mine and planning inventory shutdowns in December at three of our Saskatchewan mines (Allan, Cory and Lanigan). While we anticipate production in the fourth quarter to be reduced by nearly 500,000 mt, we do not expect employee layoffs."

"Despite challenges over recent months, we are seeing signs of a shift in focus by distributors and farmers to 2016," Tilk said. "We believe the need for increased global agricultural production – coupled with supportive crop prices – provides a compelling opportunity for farmers."

PotashCorp has revised full-year expectations for the potash business, lowering sales volume guidance to a range of 9.0-9.2 million mt and it now expects potash gross margin of $1.4-$1.5 billion, reflecting weaker volumes and pricing.

The company has lowered the top end of the previous combined nitrogen and phosphate gross margin guidance range and now estimates it will generate between $1.0-$1.1 billion. In nitrogen, it expects total gross margin below last year’s record as increased global supply is expected to keep prices for most products below 2014 levels. Additionally, weaker North American demand, reduced production due to mechanical challenges and an expansion-related turnaround at Lima are expected to keep sales volumes below last year’s levels. In phosphate, supportive market fundamentals and our higher-netback product mix are expected to support gross margin above 2014 levels.

PotashCorp has lowered the range for income from offshore equity investments to $165-$175 million due to a weaker-than-expected potash earnings environment and it has also slightly increased the estimate for selling and administrative expenses to a range of $245-$250 million.

Due to the continued strength of the US dollar, it has revised the full-year foreign exchange rate assumption to C$1.26 per US dollar.

As a result of the noted changes, it has revised full-year 2015 earnings guidance to $1.55-$1.65 per share.

Tampa NH3 down for November – Alert

The Tampa anhydrous ammonia prices were down $15/mt for November, settling at $420/mt CFR from October’s $435/mt in trades by major players.