CEO Mark Pytosh has announced the company’s financial performance for the fourth quarter (Q4) of 2024, reporting net sales of $140 million, a net income of $18 million, and earnings before interest, taxes, depreciation, and amortization (EBITDA) of $50 million. Additionally, the company declared a distribution of $1.75 per common unit, which is scheduled to be paid on March 10, 2025.
For the full year, the company achieved an EBITDA of $179 million and distributed a total of $6.76 per common unit to its shareholders. Ammonia utilization for the year reached an impressive 96%, with the East Dubuque facility setting record production levels. Pytosh emphasized that the company entered 2025 with a “tight supply and demand” scenario for nitrogen fertilizer products, influenced by rising grain prices and favorable spring planting conditions. He further stated, “With the recent rally in grain prices, market conditions look favorable for the spring planting season.”
Financial Performance Highlights
Fourth Quarter 2024 Results
- Net Sales: The company reported net sales of $140 million for Q4 2024.
- Net Income: Net income for the quarter stood at $18 million.
- EBITDA: The company achieved an EBITDA of $50 million.
- Average UAN Prices: The company sold urea ammonium nitrate (UAN) at an average price of $229 per ton during the quarter.
- Ammonia Sales: The company’s ammonia was sold at an average price of $475 per ton.
- Production Levels: Total UAN production for Q4 2024 was 310,000 tons, while ammonia sales reached 97,000 tons.
- Operating Expenses: Direct operating expenses for the quarter amounted to $56 million.
- Capital Expenditures: The company invested $18 million in capital spending, primarily for maintenance-related activities.
- Improved EBITDA: The increase in EBITDA was attributed to lower petroleum coke (pet coke) feedstock costs and reduced repair and maintenance expenses compared to Q4 2023.
Full-Year 2024 Results
- Net Sales: The company recorded total net sales of $525 million for the year.
- Operating Income: The total operating income for 2024 reached $90 million.
- Net Income: Full-year net income amounted to $61 million.
- EBITDA: The company reported an EBITDA of $179 million for 2024.
- Total Distributions: Shareholders received distributions totaling $6.76 per common unit throughout the year.
- Ammonia Utilization: The company achieved a 96% utilization rate for ammonia production, with East Dubuque reaching record output levels.
Liquidity and Expense Management
Chief Financial Officer (CFO) Dane Neumann provided an update on the company’s liquidity and expense management. As of the end of Q4 2024, the company had a total liquidity position of $130 million, which included $91 million in cash reserves. Direct operating expenses for the quarter amounted to $56 million, while capital expenditures were recorded at $18 million. These expenses were mainly allocated toward maintenance and essential operational upgrades.
Business Outlook for 2025
Management has outlined projections for the first quarter (Q1) of 2025, forecasting ammonia utilization rates to range between 95% and 100%. Additionally, direct operating expenses for the quarter are expected to be in the range of $55 million to $65 million, while capital spending is estimated to be between $12 million and $16 million.
CEO Mark Pytosh remains optimistic about the demand for nitrogen fertilizers in 2025, primarily due to increased corn planting acreage. He highlighted expectations for an expansion in corn acreage, estimating between 91 million and 94 million acres to be planted in the spring season. This increase is attributed to higher grain prices, which, in turn, drive stronger demand for nitrogen-based fertilizers.
Strategic Initiatives
In an effort to enhance operational flexibility, the company plans to implement a dual-feedstock capability at its Coffeyville facility. This initiative will allow the facility to switch between natural gas and pet coke as feedstocks, depending on cost and market conditions. The implementation of this dual-feedstock capability is currently subject to approval by the company’s Board of Directors.
Market Conditions and Industry Outlook
The nitrogen fertilizer industry is currently experiencing a period of tight supply and demand, largely due to higher grain prices and favorable planting conditions. The company expects this trend to persist into 2025, which could provide continued support for nitrogen fertilizer pricing and demand.
With grain prices rallying and farmers preparing for a robust planting season, the company is well-positioned to capitalize on these favorable market conditions. The management team remains focused on optimizing production efficiency, controlling costs, and maximizing shareholder value through disciplined capital allocation and strategic investments.
The company’s financial results for Q4 2024 and the full-year period reflect strong operational performance, improved EBITDA, and efficient cost management. As the company moves into 2025, it remains optimistic about the demand for nitrogen fertilizers, particularly in light of increased corn acreage and rising grain prices.
With a solid liquidity position, strategic operational enhancements, and a focus on maximizing shareholder value, the company is well-positioned for continued success in the upcoming fiscal year.
