CVR Partners(US:UAN)2024-07-30 20:23Financial Performance - Net sales for Q2 2024 were $132.9 million, a decrease of 27.2% compared to $183.0 million in Q2 2023[18]. - Operating income for Q2 2024 was $33.6 million, down 49.6% from $66.7 million in Q2 2023[18]. - Net income for the first half of 2024 was $38.8 million, a decline of 76.0% compared to $161.7 million in the same period of 2023[24]. - For the three months ended June 30, 2024, total revenue was $132.9 million, a decrease of 27.1% compared to $183.0 million for the same period in 2023[49]. - The Partnership's net sales, exclusive of freight and other, were $119.4 million for the three months ended June 30, 2024, down from $167.0 million in the prior year, representing a decline of 28.5%[49]. - Net income for the three months ended June 30, 2024, was $26.2 million, down from $59.9 million in the prior year, a decrease of 56.2%[104]. - For the six months ended June 30, 2024, net sales decreased to $260.6 million from $409.3 million for the same period in 2023, primarily due to unfavorable UAN and ammonia pricing conditions contributing $102.5 million and $35.5 million in lower revenues, respectively[111]. - EBITDA for the three months ended June 30, 2024, was $53.8 million, compared to $86.5 million for the same period in 2023, reflecting a significant decline in operational performance[124]. Cash Flow and Distributions - Cash distributions to common unitholders totaled $24.0 million for the first half of 2024, compared to $139.8 million in the same period of 2023, a decrease of 82.8%[24]. - Available Cash for Distribution for the quarter was $20.1 million, down from $43.8 million in the same quarter of 2023, indicating reduced cash flow available for unitholder distributions[124]. - Total quarterly distributions for 2024 reached $38,050,000, compared to $281,364,000 for the entire year of 2023[63]. - The Partnership declared a distribution of $1.90 per common unit for Q2 2024, totaling approximately $20.1 million, payable on August 19, 2024[63]. - Cash distributions paid in H1 2024 decreased by $183.2 million compared to the same period in 2023[143]. - The total quarterly distributions for 2023 amounted to $26.62 per common unit, totaling $281.364 million[139]. Assets and Liabilities - Cash and cash equivalents increased to $47.5 million as of June 30, 2024, from $45.3 million at the end of 2023[16]. - Total current assets rose to $183.6 million as of June 30, 2024, compared to $165.9 million at the end of 2023, reflecting a 10.7% increase[16]. - Total liabilities decreased to $655.8 million as of June 30, 2024, down from $672.5 million at the end of 2023, indicating a reduction of 2.5%[16]. - The Partnership's long-term debt remained stable at $547.6 million as of June 30, 2024, compared to $547.3 million at the end of 2023[46]. - As of June 30, 2024, total inventories increased to $80.6 million from $69.2 million as of December 31, 2023, reflecting a rise of 16.5%[36]. - The Partnership's total other current liabilities increased to $21.9 million as of June 30, 2024, compared to $20.9 million at the end of 2023, reflecting a rise of 4.9%[45]. Operational Highlights - The partnership operates two manufacturing facilities, producing nitrogen fertilizer products essential for crop yield improvement[26]. - Total product sales volumes for the three and six months ended June 30, 2024, were negatively impacted by a 14-day planned outage at the Coffeyville Facility and favorable weather conditions that shifted sales into the first quarter[100]. - The company’s ammonia utilization rate increased to 102% for the three months ended June 30, 2024, compared to 100% in the same period of 2023, indicating improved operational efficiency[94]. - The Coffeyville Facility is exploring the potential to utilize natural gas as an optional feedstock alongside pet coke, which could enhance production flexibility[87]. Market Conditions and Risks - The general business environment remains volatile, influenced by feedstock availability, product demand, and inflation, which could impact future financial results[72]. - The geopolitical risks from conflicts in the Middle East and the ongoing Russia-Ukraine war could disrupt global fertilizer and agriculture markets, impacting the company's operations and cash flows[76]. - The USDA estimates that farmers will plant 91.5 million corn acres in spring 2024, a decrease of 3.3% from 2023, while soybean acres are expected to increase by 3.0% to 86.1 million[80]. - Ammonia sales prices decreased by 26% for the three months and 32% for the six months ended June 30, 2024, compared to the same periods in 2023, primarily due to lower natural gas prices[100]. - The average sales prices for ammonia and UAN decreased by $245 and $122 per ton, respectively, for the six months ended June 30, 2024, attributed to lower natural gas prices and increased global supplies of nitrogen fertilizer[112]. Expenses and Costs - Direct operating expenses for the six months ended June 30, 2024, were $102.5 million, down from $113.3 million in the same period of 2023, primarily due to decreased utility costs[116]. - Selling, general, and administrative expenses decreased to $13.6 million for the six months ended June 30, 2024, from $14.7 million in the same period of 2023, primarily due to lower share-based compensation[119]. - Total share-based compensation expense for Q2 2024 was $675,000, a decrease of 69% from $2,203,000 in Q2 2023[10]. - For the six months ended June 30, 2024, total share-based compensation expense was $2,702,000, down 35% from $4,136,000 in the same period of 2023[10]. Compliance and Controls - The Partnership remains compliant with all covenants under its debt instruments as of June 30, 2024, ensuring financial stability[130]. - There were no material changes in market risks or internal controls over financial reporting as of June 30, 2024[145][147]. - The Partnership's disclosure controls and procedures were deemed effective as of June 30, 2024[146].