CVR Partners(US:UAN)2024-10-29 20:27Financial Performance - Net sales for the three months ended September 30, 2024, were $125,203,000, a decrease of 4.3% from $130,592,000 in the same period of 2023[11]. - Operating income increased to $10,996,000 for the three months ended September 30, 2024, compared to $8,138,000 in the prior year, reflecting a growth of 35.5%[11]. - Net income for the nine months ended September 30, 2024, was $42,605, down 73.8% from $162,458 in the same period of 2023[11]. - Basic and diluted earnings per common unit for the three months ended September 30, 2024, were $0.36, compared to $0.07 in the same period of 2023[11]. - For the nine months ended September 30, 2024, total revenue was $346.6 million, a decrease of 29.9% compared to $493.5 million for the same period in 2023[37]. - For the nine months ended September 30, 2024, net sales were $385.8 million, a decrease from $539.9 million in the same period of 2023, attributed to unfavorable pricing conditions[89]. Assets and Liabilities - As of September 30, 2024, total current assets increased to $226,625,000 from $165,869,000 as of December 31, 2023, representing a growth of 36.5%[10]. - Total liabilities and partners' capital reached $986,626,000, compared to $975,332,000 at the end of 2023, reflecting a slight increase of 1.3%[10]. - Long-term debt remained stable at $547,710,000, showing minimal change from $547,308,000[10]. - Total partners' capital decreased to $287,352,000 from $302,880,000, reflecting a decline of 5.1%[10]. - Cash and cash equivalents rose significantly to $110,539,000, up from $45,279,000, marking an increase of 144.5%[10]. Revenue and Sales - Ammonia sales for the three months ended September 30, 2024, were $24.6 million, up 9.5% from $22.5 million in 2023[37]. - UAN sales decreased to $76.7 million for the three months ended September 30, 2024, down 11.1% from $86.3 million in 2023[37]. - The Partnership recognized revenue of $14.1 million during the nine months ended September 30, 2024, from deferred revenue balances[40]. - The Partnership had approximately $8.6 million of remaining performance obligations for contracts with an original expected duration of more than one year as of September 30, 2024[39]. Cash Flow and Distributions - Net cash provided by operating activities for the nine months ended September 30, 2024, was $137,750, a decrease of 47.3% from $261,389 in the same period of 2023[13]. - Cash distributions to common unitholders - Non-affiliates for the nine months ended September 30, 2024, totaled $(36,727), down from $(167,408) in the same period of 2023, reflecting a significant reduction in distributions[13]. - Available cash for distribution in Q3 2024 was $12.61 million, down from $16.37 million in Q3 2023, a decrease of 23.5%[101]. - The Partnership declared a distribution of $1.19 per common unit for the third quarter of 2024, amounting to $12.6 million, payable to unitholders[113]. Operational Insights - The Partnership operates two manufacturing facilities producing nitrogen fertilizer products, which are essential for improving crop yield and quality[14]. - The Partnership aims to achieve industry-leading utilization rates through safe and reliable operations, focusing on operational improvements and cost reductions[57]. - The company plans to utilize natural gas as an optional feedstock at the Coffeyville Facility, which could enhance production flexibility[75]. - Ammonia utilization decreased to 97% in Q3 2024 from 99% in Q3 2023, and for the nine months ended September 30, 2024, utilization was 96% compared to 101% in the same period of 2023[78]. Market and Economic Conditions - The general business environment remains volatile, influenced by feedstock availability, product demand, and inflationary pressures[62]. - Geopolitical risks, including the Middle East conflict and the Russia-Ukraine war, may disrupt global fertilizer and agriculture markets, impacting supply chains[66]. - The demand for nitrogen fertilizer is expected to remain strong due to the anticipated increase in corn planting and the ongoing use of corn for ethanol production[67]. - Seasonal fluctuations in demand for nitrogen fertilizer products are expected, influenced by weather conditions and market dynamics[61]. Cost and Expenses - The cost of materials and other decreased to $26.3 million in Q3 2024 from $31.0 million in Q3 2023, driven by lower natural gas and pet coke prices[93]. - Depreciation and amortization expense for the three months ended September 30, 2024, was $24.5 million, up from $23.9 million for the same period in 2023, reflecting a year-over-year increase of 2.5%[24]. - Share-based compensation expense for the three months ended September 30, 2024, was $714,000, a decrease of 81.4% from $3.8 million in the same period of 2023[40]. Future Outlook - The Partnership expects to capitalize approximately $21 million upon the commencement of a finance lease related to an On-Site Product Supply Agreement with Messer LLC in Q4 2024[32]. - The Partnership does not expect the adoption of new accounting standards to have a material impact on its consolidated financial statements, with additional disclosures anticipated starting December 31, 2024[21][22]. - Forward-looking statements indicate potential uncertainties regarding future operations and financial position, influenced by various external factors[5].