Commenting on the results for the period, D. Hunt Ramsbottom, CEO of Rentech Nitrogen GP, LLC, stated, “Rentech Nitrogen continues to perform exceptionally well. The facility, which operated at 100% capacity during the quarter, achieved strong margins. This resulted in a better than anticipated second quarter cash distribution of $1.17 per unit.” Mr. Ramsbottom continued, “The drought has severely impacted corn yields, which has pushed corn and nitrogen prices higher. As a result, we now expect to achieve total cash distributions in excess of $3.30 per unit this year. We also anticipate 2013 to be a strong year, given the early indications of higher nitrogen product pricing for sales we have transacted for next year.”
Rentech Nitrogen continues to benefit from relatively low North American natural gas prices, which, when coupled with strong nitrogen product prices, contributed to gross profit margin of 65% for the period, up from 50% for the comparable period in the prior year.
Selling, general and administrative (SG&A) expenses were $3.9 million for the three months ended June 30, 2012, compared to $1.5 million for the prior-year period. The increase in SG&A expenses was primarily due to costs associated with having become a publicly traded limited partnership and included an increase of $0.7 million in non-cash unit-based compensation expense.
Six months ended June 30, 2012Revenues for the six months ended June 30, 2012 were $109.1 million, compared to $98.3 million for the comparable period in the prior year. The increase in revenue for the six months ended June 30, 2012 was primarily due to increased sale prices for ammonia and UAN of 9% and 25%, respectively, over the same period last year, which was partially offset by decreased sales volume for UAN as described above. During the six months ended June 30, 2012, Rentech Nitrogen generated operating income of $61.1 million, compared to $44.9 million during the comparable period in the prior year.
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