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CVR ENERGY INC (CVI)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 rebounded from Q3’s loss: net sales $1.947B, EPS $0.28, EBITDA $122M; adjusted EPS was $(0.13) and adjusted EBITDA $67M, sequentially better than Q3’s $(1.24) EPS and $63M adjusted EBITDA .
  • Petroleum margin pressure persisted as Group 3 2-1-1 fell to $14.32/bbl; adjusted refining margin per barrel was $6.45 vs $8.23 in Q3 and $12.91 in Q4 2023; direct OpEx rose to $5.13/bbl .
  • Renewables improved materially: margin $0.79/gal with adjusted EBITDA $9M vs loss in Q4 2023; management cut weighted capacity to ~80M gal/year due to catalyst constraints and awaits subsidy clarity for SAF/RD strategy .
  • Liquidity bolstered by $318M Term Loan B and ~$90M Midway JV sale; cash $987M at year-end; management targets deleveraging back to ~2–2.5x mid-cycle EBITDA and is open to reinstating dividends if cracks improve .
  • Near-term catalyst: accelerated Coffeyville turnaround through late Q1 (throughput guide 120–135 kbpd) and jet fuel project tie-ins; management expects potential crack recovery on supply rationalization into summer driving season .

What Went Well and What Went Wrong

  • What Went Well

    • Renewables pivot: Q4 renewables margin $14M ($0.79/gal) and adjusted EBITDA $9M, aided by lower feedstock costs and better HOBO spread; management highlighted pretreatment and credit price improvements .
    • Fertilizer strength: Q4 segment EBITDA $50M on net sales $140M, with ammonia gate price $475/ton; ammonia utilization 96% and distribution of $1.75/unit announced .
    • Liquidity actions: $318M term loan and ~$90M asset sale lifted cash to $987M; management confident liquidity covers the large Coffeyville turnaround .
    • Quote: “We commenced our planned Coffeyville turnaround early, which should position us well for the improvement in cracks we expect as summer driving season begins and capacity rationalization occurs.” — CEO Dave Lamp .

  • What Went Wrong

    • Margin compression: Adjusted refining margin per barrel fell to $6.45 (vs $12.91 LY) as Group 3 2-1-1 softened and RIN expense weighed on capture; direct OpEx/ bbl increased YoY .
    • Regulatory headwinds: EPA denied Wynnewood’s 2023 small refinery exemption; RIN prices increased QoQ; CVI continues litigation/stay efforts in the Fifth Circuit .
    • Catalyst limitations in Renewables: weighted capacity reduced to ~80M gal/year due to catalyst life/yield constraints; strategy dependent on clarity around BTC/45Z and subsidy durability .
    • Dividend uncertainty: board suspended dividend in Q3 amid margin weakness and turnaround needs; Q4 2024 dividends declared per share $0.00 .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Net Sales ($USD Billions)$2.202 $1.833 $1.947
EPS (Basic & Diluted, $)$0.91 $(1.24) $0.28
Adjusted EPS ($)$0.65 $(0.50) $(0.13)
EBITDA ($USD Millions)$204 $(35) $122
Adjusted EBITDA ($USD Millions)$170 $63 $67
SegmentQ4 2023 Net Sales ($MM)Q3 2024 Net Sales ($MM)Q4 2024 Net Sales ($MM)Q4 2023 EBITDA ($MM)Q3 2024 EBITDA ($MM)Q4 2024 EBITDA ($MM)
Petroleum$1,997 $1,648 $1,755 $196 $(75) $72
Renewables$110 N/A (not a reportable segment in Q3)$93 $(26) N/A$3
Nitrogen Fertilizer$142 $125 $140 $38 $36 $50
Consolidated$2,202 $1,833 $1,947 $204 $(35) $122
KPIQ4 2023Q3 2024Q4 2024
Throughput (bpd)222,554 189,294 213,703
Adjusted Refining Margin ($/bbl)$12.91 $8.23 $6.45
Direct OpEx ($/bbl)$4.69 $5.72 $5.13
Group 3 2-1-1 ($/bbl)$23.66 $19.40 $14.32
Renewables KPIsQ4 2023Q4 2024
Margin ($/gal)$(0.90) $0.79
Adjusted Margin ($/gal)$(0.43) $1.16
Throughput (gpd)200,174 186,970
Fertilizer KPIsQ4 2023Q4 2024
Ammonia price ($/ton, gate)$461 $475
UAN price ($/ton, gate)$241 $229
Ammonia utilization (%)94% 96%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Petroleum Throughput (bpd)Q1 2025N/A120,000–135,000 Newly provided
Petroleum Direct OpEx ($MM)Q1 2025N/A$95–$105 Newly provided
Turnaround ($MM)Q1 2025N/A$150–$165 Newly provided
Renewables Throughput (MM gal)Q1 2025N/A13–16 Newly provided
Renewables Direct OpEx ($MM)Q1 2025N/A$8–$10 Newly provided
Fertilizer Direct OpEx ($MM)Q1 2025N/A$55–$65 Newly provided
Capex ($MM) – TotalQ1 2025N/A$44–$63 (Petro $30–$40; Renew $2–$5; Fert $12–$16; Other $0–$2) Newly provided
CVR Energy DividendQ4 2024Q3 suspended $0.00 declared in Q4 Maintained suspension
CVR Partners Distribution ($/unit)Q4 2024$1.19 (Q3) $1.75 (Q4) Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2024)Q4 2024 CommentaryTrend
RFS/SRE litigation and RINsAggressive legal actions; DC/Fifth Circuit rulings; RINs depressed then rising EPA denied SRE again; Fifth Circuit stay not opposed; RINs rose QoQ; estimated RFS obligation $323M Continued regulatory friction; cautious optimism on relief
Liquidity/deleveragingExploring capital markets; dividend suspended; liquidity ~$713M at 9/30 $318M Term Loan B, $90M asset sale; liquidity ~$1.1B ex-CVRP; target leverage ~2–2.5x Improved liquidity; focus on deleveraging
Renewables (RD/SAF) economicsPretreater online; target utilization ramp; BTC/credit uncertainty Cut weighted capacity to ~80M gal; run ~5,000 bpd; pause on SAF/partners until subsidy clarity Operationally improved margins; strategic caution
Coffeyville turnaround/capexMajor turnaround planned Q1 2025; ~45 days oil-to-oil Accelerated turnaround; 10–15 day extension potential; $150–$165MM spend Q1 Larger scope/timing brought forward
Jet fuel strategyNot detailedTie-ins during turnaround; potential to make up to 9 kbpd jet by end Q3; reduce RFS obligation by up to $18M RINs; margin uplift $5–$7/bbl New initiative; potential RIN mitigation
Footprint diversificationEvaluating acquisitions; diversify from Group 3 Focus “more inland and west,” possibly north; bid/ask wide Strategic interest maintained
Fertilizer marketMid-cycle pricing; strong demand Prices rising to start year; good spring outlook; utilization 96% Steady-to-improving backdrop

Management Commentary

  • Prepared remarks: “Benchmark cracks softened during the fourth quarter with the Group 3 2-1-1 averaging $14.32 per barrel... We are cautiously optimistic that refining market conditions will improve relative to 2024... closures could result in nearly 800,000 barrels of refining capacity in the U.S. and Europe being shut down this year.” — CEO Dave Lamp .
  • Strategy on renewables/SAF: “We are left with an investment with uncertain returns in the business that today is breakeven at best... it is critical to get clarity on available and durability of government subsidies before we continue investing additional capital or time into such ventures.” — CEO Dave Lamp .
  • Financial positioning: “Total liquidity as of December 31, excluding CVR Partners, was approximately $1.1 billion... we feel confident in our ability to manage through the large turnaround underway at Coffeyville.” — CFO Dane Neumann .

Q&A Highlights

  • Capital allocation: Management prioritizes deleveraging term loan while remaining open to dividend reinstatement with sustained margin strength; board reviews dividend quarterly .
  • Jet fuel project: Minimal capex (piping/tankage); targeting readiness by end Q3; key constraint is building airline contracts; expected $5–$7/bbl margin uplift and lower RIN burden .
  • Portfolio diversification: Desire to reduce Mid-Con/Group 3 concentration; focus inland/west; acquisitions considered but bid/ask wide .
  • Renewables capacity: Catalyst constraints drove reduction to ~80M gal/year; adding catalyst bed/reactor would restore capacity; SAF conversion requires subsidy clarity .
  • Capture drivers: Some inventory timing benefits and run cuts aided capture; Q1 focus on normalization post-turnaround .

Estimates Context

  • We attempted to retrieve S&P Global consensus for Q4 2024 EPS, revenue, and EBITDA, but the request failed due to SPGI daily limit being exceeded; therefore, Street consensus comparisons are unavailable at this time [Values retrieved from S&P Global unavailable].
  • Given the absence of consensus data, estimate-based beat/miss determinations are not provided; analysts may need to revisit EPS and margin assumptions given Q1 2025 throughput and turnaround spend guides .

Key Takeaways for Investors

  • Near-term setup: Heavy Q1 Coffeyville turnaround (120–135 kbpd; $150–$165MM) likely depresses volumes; watch crack trajectories into spring/summer and turnaround completion timing by end-March .
  • Margin leverage: Jet fuel project (up to 9 kbpd) and potential $5–$7/bbl uplift offer structural RIN mitigation and margin improvement from late Q3 onward if commercialized .
  • Renewables optionality: Improved Q4 margins but strategic pause pending BTC/45Z clarity; capacity constrained by catalyst; capex-light until subsidy visibility improves .
  • Balance sheet: Liquidity strengthened ($987M cash) and path to deleveraging outlined; asset sales (logistics ~$20M EBITDA post-Midway) provide additional flexibility .
  • Regulatory risk: EPA SRE denial remains a swing factor; Fifth Circuit stay progress could lower effective RIN burden; monitor RIN and LCFS pricing .
  • Fertilizer ballast: Solid EBITDA and utilization support consolidated cash generation amid refining cyclicality; prices trending higher into spring .
  • Dividend watch: Board remains open to reinstatement as cracks improve and term loan is reduced; traders should watch crack spreads and leverage trajectory .

Notes:

  • Renewables segment was formally introduced effective FY 2024; Q3 2024 did not present Renewables as a reportable segment, hence N/A in segment table for Q3 .