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CVR PARTNERS, LP (UAN)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was solid operationally and financially: net sales rose 11.9% YoY to $142.9M, EBITDA rose 33.8% YoY to $52.9M, and diluted EPS increased to $2.56; distribution was lifted to $2.26 per unit, supported by 101% ammonia utilization and higher volumes/pricing mix .
  • Sequentially, revenue grew 2.4%, EBITDA +6.0%, and EPS +48%, reflecting tight nitrogen markets, earlier ammonia shipments, and lower Q1 pet coke costs, partly offset by lower UAN realized prices tied to delayed fill-season shipments .
  • Q2 2025 outlook guides to 93–97% ammonia utilization (East Dubuque control system work), direct operating expenses of $57–$62M, and capex of $18–$22M; management also narrowed 2025 total capex to $50–$60M (from $55–$70M previously) .
  • Setup into spring remains favorable: inventories are tight, farmer economics solid, and management expects stronger UAN pricing to flow through Q2; watch pet coke index uptick in Q2 and tariff/geopolitical variables as potential stock catalysts .

What Went Well and What Went Wrong

What Went Well

  • Strong production and reliability: 101% consolidated ammonia utilization; 216k tons ammonia and 348k tons UAN produced, with higher overall sales volumes YoY .
  • Pricing tailwinds emerging: Ammonia realized price +5% YoY to $554/ton; management expects Q2 UAN pricing to reflect market increases since December (“prices have escalated relatively significantly from December until now”) .
  • Cost and cash execution: Pet coke costs declined in Q1; liquidity at quarter-end totaled ~$172M (cash ~$122M plus $50M ABL), enabling a $2.26 distribution and continued funding of reliability/growth projects .
    • CEO: “Supply and demand balances for nitrogen fertilizer products remain tight and prices have continued to increase going into the spring planting season.”

What Went Wrong

  • UAN realized price -4% YoY to $256/ton due to shipment timing from 2024 fill, muting mix despite strong volumes; natural gas costs higher YoY .
  • Q2 pet coke cost headwind: management expects pet coke prices to increase in Q2 due to index adjustments, partially offsetting earlier feedstock relief .
  • Macro/tariff risk: Potential fertilizer and grain tariff dynamics, MENA/Russia supply risks, and European gas volatility could elevate market volatility and input costs .

Financial Results

P&L summary (USD Millions, per-unit as noted)

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Net Sales$127.7 $125.2 $139.6 $142.9
EBITDA$39.5 $35.8 $49.8 $52.9
Net Income$12.6 $3.8 $18.3 $27.1
Diluted EPS (per unit)$1.19 $0.36 $1.73 $2.56
Distribution (per unit)$1.68 declared $1.19 $1.75 $2.26

Margins (calculated from cited figures)

MarginQ1 2024Q3 2024Q4 2024Q1 2025
EBITDA Margin %30.9% 28.6% 35.7% 37.0%
Net Income Margin %9.8% 3.0% 13.1% 18.9%

Change analysis (calculated from cited figures)

MetricYoY (Q1’25 vs Q1’24)Seq (Q1’25 vs Q4’24)
Net Sales+$15.2M / +11.9% +$3.3M / +2.4%
EBITDA+$13.3M / +33.8% +$3.0M / +6.0%
EPS (per unit)+$1.37 / +115% +$0.83 / +48%

Product mix and pricing

KPIQ1 2024Q4 2024Q1 2025
UAN Sales Volumes (k tons)284 310 336
Ammonia Sales Volumes (k tons)70 97 60
UAN Realized Price ($/ton)$267 $229 $256
Ammonia Realized Price ($/ton)$528 $475 $554

Operations and costs

KPIQ1 2024Q4 2024Q1 2025
Ammonia Utilization90% 96% 101%
Direct Operating Expenses ($M)$55.7 $55.9 $54.5
Capital Expenditures ($M)$4.6 $17.9 $5.9
Operating Cash Flow ($M)$42.4 $12.8 $55.4
Cash & Equivalents ($M, period-end)—$90.9 $121.8

Explanations

  • YoY strength driven by higher UAN volumes and higher ammonia pricing, plus lower pet coke costs; UAN prices lower YoY due to delayed shipments from the 2024 fill season .
  • Q1 operating costs benefited from pet coke softness; management cautioned pet coke indices will lift Q2 costs .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Ammonia UtilizationQ2 2025n/a93–97% New
Direct Operating ExpensesQ2 2025n/a$57–$62M New
Total Capital ExpendituresQ2 2025n/a$18–$22M New
Total Capital SpendingFY 2025$55–$70M (maint. $35–$45M; growth $20–$25M) $50–$60M (maint. ~$40–$45M) Lowered/narrowed
Q1 Opex vs Prior GuideQ1 2025$55–$65M DOEs Actual $54.5M Beat vs guide
Q1 Capex vs Prior GuideQ1 2025$12–$16M Actual $5.9M Below guide

Notes: Q2 utilization reduction reflects planned East Dubuque control system upgrade downtime (reliability project) .

Earnings Call Themes & Trends

TopicQ3 2024Q4 2024Q1 2025Trend
Market tightness & pricingPrices lifted vs Q3’23; inventories low; positive fall demand Tight start to 2025; prices rising into spring Tight inventories; pricing up since December; strong spring demand Strengthening
Farmer economics & acresRecord yields; corn pricing softer into Q4 Grain price rally into spring; corn 91–94M acres expected USDA: ~95M corn, ~83M soy acres; carryout ~10%/~9% Supportive
Feedstock costs (pet coke, gas)Pet coke softening expected in 2025 Pet coke costs declining in Q1 2025 Pet coke to increase in Q2 via index; EU gas ~$12/MMBtu Mixed (near-term headwind)
Dual-feed flexibility project (Coffeyville)~$10M concept; using reserves Engineering done; plan to seek Board approval Technically feasible; low double-digit $M; potential H2 from refinery to lift capacity Advancing
Reliability/debottleneckingStarting projects; reserve funding New boilers at Coffeyville; continued projects; reserve funding East Dubuque control system upgrade in Q2; continued projects Executing
Tariffs/geopoliticsMENA/Russia risks; EU cost curve high Watching import tariffs; EU gas inventories risk Tariff scenarios on fertilizer/grains; geopolitical wildcards persist Ongoing risk

Management Commentary

  • CEO (operations/pricing): “Ammonia plant utilization of 101%…prices have continued to increase going into the spring planting season.”
  • CEO (Q2 pricing): “Prices have escalated relatively significantly from December until now and the second quarter is going to reflect those higher prices in UAN.”
  • CFO (cash/liquidity/distribution): “We ended the quarter with total liquidity of $172 million…$122 million in cash and availability under the ABL…$24 million of cash available for distribution, and the Board…declared $2.26 per common unit.”
  • CEO (projects/costs): “We’re planning to install a nitrous oxide abatement unit at Coffeyville during fall 2025 turnaround…expect pet coke prices increase in the second quarter as a result of higher quarterly index adjustments.”

Q&A Highlights

  • Q2 utilization step-down is planned: East Dubuque reformer control system upgrade; expected to improve reliability post-installation .
  • Dual-feed (pet coke/natural gas) project: low double-digit $M; technically feasible to feed natural gas; exploring additional hydrogen from the refinery to lift capacity; operation could flex between gasifiers over months, not days .
  • Reserves for future operating needs: Board is reserving cash to fund higher capex/turnaround cadence; may see additional short-term reserves with subsequent releases subject to Board approval .
  • Pricing cadence: UAN price softness in Q1 tied to earlier-booked volumes; Q2 expected to reflect current higher market; system likely “relatively empty” by June 30, supportive for summer fill pricing .

Estimates Context

  • Wall Street consensus (S&P Global) for Q1 2025 appeared unavailable for EPS and revenue; no beat/miss framing provided by S&P Global coverage for this period.*
  • Implications: With tight inventories and management indicating stronger realized UAN pricing in Q2, models may need to reflect higher sequential pricing and a pet coke index-related cost uptick, alongside planned East Dubuque downtime .

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Underlying execution remains strong (101% utilization; improving margins), supporting higher distribution ($2.26) and positive sequential/YoY earnings trajectory into spring .
  • Near-term setup is constructive: tight nitrogen inventories, favorable farmer economics, and expected Q2 price realization for UAN; monitor summer fill strength as a pricing barometer .
  • Watch cost mix: Q2 pet coke index increases create a cost headwind versus Q1; however, EU gas keeps Europe at high end of cost curve, helping global balances .
  • Capital framework is conservative: $50–$60M FY25 capex (lowered/narrowed), ample liquidity, and Board-managed reserves to fund reliability/debottlenecking and environmental projects .
  • Strategic optionality: Coffeyville dual-feed and potential refinery hydrogen integration provide a medium-term lever to optimize costs and increase capacity/reliability .
  • Risk matrix: tariffs (fertilizer and grains), geopolitical supply disruptions, and weather remain key variables for price/volume volatility; management expects elevated volatility to persist .
  • Trading lens: Q2 print could benefit from realized price uplift versus Q1 and continued tightness, tempered by pet coke cost normalization and planned downtime; distribution sensitivity remains tied to realized pricing and utilization .