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CVR PARTNERS, LP (UAN)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered net sales of $139.6M, net income of $18.3M ($1.73 per unit), and EBITDA of $49.8M; management declared a $1.75 distribution, citing strong shipments and tighter nitrogen markets heading into spring .
  • Pricing mixed YoY: ammonia +3% to $475/ton while UAN −5% to $229/ton; vs Q3, pricing and shipments improved, supporting sequential revenue and EBITDA uplift .
  • Q4 direct operating expenses and capex finished below prior Q4 guidance ranges (DOX $55.9M vs guided $60–$70M; capex $17.9M vs guided $19–$23M), reflecting cost discipline and lower maintenance intensity .
  • Outlook: Q1 2025 guidance targets 95–100% ammonia utilization, DOX $55–$65M, and capex $12–$16M; management highlighted tight supply/demand, rising grain prices, and favorable spring conditions as catalysts .

What Went Well and What Went Wrong

What Went Well

  • Sequential improvement: Q4 net sales rose to $139.6M (from $125.2M in Q3) and EBITDA increased to $49.8M (from $35.8M in Q3), supported by stronger shipments and pricing vs Q3 .
  • Cost control: Q4 direct operating expenses of $55.9M and capex of $17.9M came in below the Q4 guidance ranges ($60–$70M, $19–$23M), boosting available cash for distribution ($18.5M) and enabling a $1.75 distribution .
  • Strong operations: consolidated ammonia utilization reached 96% in Q4 (full-year 96%); management cited “safe, reliable operations” and “strong shipments,” with Q4 ammonia sales ~97k tons and UAN sales ~310k tons .

Quote: “Supply and demand for nitrogen fertilizer products have been tight and prices have continued to increase… market conditions look favorable for the spring planting season.” — CEO Mark Pytosh .

What Went Wrong

  • YoY headwinds: net sales slightly declined YoY ($139.6M vs $141.6M), and UAN pricing fell 5% YoY to $229/ton, reflecting end-market price pressure despite strong shipments .
  • Weather impacts: management cited challenging fall application conditions contributing to UAN sales volumes down ~3% YoY and the shift of some ammonia volumes across periods .
  • Macro exposure: management flagged potential tariff risks (e.g., Canadian fertilizer imports) and structural European gas issues (c. $15/MMBtu), sustaining global volatility and cost curve uncertainty .

Financial Results

Core P&L metrics (USD Millions except EPS and per-unit distribution)

MetricQ2 2024Q3 2024Q4 2024
Net Sales ($MM)$132.9 $125.2 $139.6
Net Income ($MM)$26.2 $3.8 $18.3
Diluted EPS ($)$2.48 $0.36 $1.73
EBITDA ($MM)$53.8 $35.8 $49.8
Distribution per Unit ($)$1.90 $1.19 $1.75

Pricing and Volumes

MetricQ2 2024Q3 2024Q4 2024
UAN avg realized price ($/ton)$268 $229 $229
Ammonia avg realized price ($/ton)$520 $399 $475
UAN sales volume (k tons)~330 ~336 310
Ammonia sales volume (k tons)~43 ~62 ~97

Operational KPIs and Costs

MetricQ2 2024Q3 2024Q4 2024
Ammonia utilization (%)102% 97% 96%
Capex ($MM)$4.9 $9.7 $17.9
Direct Operating Expenses ($MM)$46.9 $55.8 $55.9
Petcoke cost ($/ton)$62.96 $44.69 $55.71
Nat gas used in production ($/MMBtu)$1.93 $2.19 $3.00

YoY vs Q4 2023

MetricQ4 2023Q4 2024
Net Sales ($MM)$141.6 $139.6
Diluted EPS ($)$0.94 $1.73
EBITDA ($MM)$37.9 $49.8
UAN price ($/ton)$241 $229
Ammonia price ($/ton)$461 $475

Net Sales Components

ComponentQ4 2023Q4 2024
Fertilizer Sales ($MM)$127.7 $125.8
Other ($MM)$14.0 $13.7
Total Net Sales ($MM)$141.6 $139.6

Non-GAAP Bridge (Q4 2024)

ItemQ4 2024 ($MM)
Net Income$18.3
+ Interest, net$7.4
+ Income tax$0.1
+ D&A$24.0
EBITDA$49.8
− Accrued interest reserve$(8.7)
− Capex reserve$(18.7)
− Turnaround reserve$(3.2)
± Equity method$(0.8)
Available Cash for Distribution$18.5

Guidance Changes

Q4 2024 Guidance vs Actual (Outcome)

MetricPeriodPrevious GuidanceActualChange
Ammonia utilization (consolidated)Q4 202492–97% 96% Met high end
Direct operating expenses ($MM)Q4 2024$60–$70 $55.9 Lower than guided
Total capex ($MM)Q4 2024$19–$23 $17.9 Lower than guided

Current Guidance Issued

MetricPeriodCurrent GuidanceComment
Ammonia utilizationQ1 202595–100% Tight supply/demand backdrop
Direct operating expenses ($MM)Q1 2025$55–$65 Excl. D&A, turnaround, inventory
Total capex ($MM)Q1 2025$12–$16 Accrual basis
Distribution per unitQ4 2024$1.75 declared Variable MLP policy

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Nitrogen supply/demandStrong spring demand; pricing steady vs Q1 Prices rising into fall; strong demand Tight to start 2025; prices increasing; strong shipments Strengthening
Grain prices & acresCorn ~$4.10; soy ~$10.35; planted acres 91.5M corn/86.1M soy Record-high yields projected; corn Dec ~$4.15 Corn ~$5; soy ~$10.35; 91–94M corn acres est. Improving farmer economics
European nat gas~$10–$11/MMBtu; structural issues ~$13/MMBtu; high-cost curve ~ $15/MMBtu; closures; tight S/D into H1’25 Persistent tightness
Feedstock flexibility (Coffeyville)Engineering studies; aim 2025 install if approved Progress; targeted flexibility Dual gasifier plan: run petcoke + nat gas; decisions over months Executing plans
Customer ordering cadence——Still ratable; little change post Fed cuts Steady
Tariffs & policy risk—Geopolitical risks monitored Monitoring potential tariffs on Canadian imports; price impact risk Rising policy focus
Safety/operations102% utilization; dependable ops 97% utilization; reliability focus 96% utilization; debottlenecking; boiler installs Reliability investment

Management Commentary

  • “Despite some unfavorable weather conditions in the fourth quarter, we saw good demand for nitrogen fertilizer that drove prices higher compared to the third quarter, and we had strong shipments from our facilities.” — CEO Mark Pytosh .
  • “Supply and demand for nitrogen fertilizer products have been tight to start the new year and prices have continued to increase… market conditions look favorable for the spring planting season.” — CEO Mark Pytosh .
  • “We have completed detailed engineering studies on the potential to utilize natural gas as an alternative feedstock to third-party pet coke… If successfully implemented this project could give us the ability to choose the optimal feedstock mix.” — CEO Mark Pytosh .
  • “Assessing our cash available for distribution… EBITDA of $50M and net cash needs of ~$32M… result was $18M of cash available for distribution and the Board… declared $1.75 per common unit.” — CFO Dane Neumann .

Q&A Highlights

  • Ordering patterns: Despite ~100 bps fed cuts, customers remain in ratable buying mode; little change in inventory stance .
  • Dual-feedstock project: Plan to seek Board approval and begin construction in 2025 to enable 2026 feedstock choice; operationally could run both petcoke and nat gas gasifiers, flexing over months (not daily/weekly) .
  • Market tightness: Urea tight globally; UAN seen attractive vs urea; customers seeking more than available March tonnage; strength likely into April/May .
  • Reserves/capex: Growth/turnaround reserves broadly consistent; 2025 growth capex funded from prior reserves .

Estimates Context

  • Wall Street consensus via S&P Global for Q4 2024 EPS and revenue was unavailable today due to data access limits; as a result, estimate-versus-actual comparisons cannot be provided. Values would ordinarily be retrieved from S&P Global’s consensus datasets.

Key Takeaways for Investors

  • Sequential recovery: Q4 revenue and EBITDA improved vs Q3 on stronger shipments and pricing; EPS rose to $1.73, indicating operational momentum into spring .
  • Cost outperformance: DOX ($55.9M) and capex ($17.9M) both finished below guided ranges, supporting available cash and a $1.75 distribution; watch if cost discipline persists into Q1 guidance ($55–$65M DOX, $12–$16M capex) .
  • Pricing setup favorable: Ammonia pricing up YoY (+3%) and improving vs Q3; Urea tightness may pull UAN demand/pricing higher as spring cash orders ramp .
  • Reliability and flexibility: Debottlenecking and new boilers installed; feedstock flexibility project could structurally enhance cost positioning and optionality by 2026 .
  • Macro watchlist: European gas remains elevated (~$15/MMBtu) with closures sustaining global tightness; potential U.S. tariffs on Canadian fertilizer could lift domestic prices .
  • Farmer economics: Grain price rally and expected 91–94M corn acres support robust nitrogen demand into Q1/Q2; order book stronger than last year with limited near-term March availability .
  • Distribution framework: Variable MLP policy and ACFD mechanics remain central; investors should monitor reserves and non-GAAP adjustments (interest/capex/turnaround) that influence payout capacity .