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TheStreet Open House

Rentech Nitrogen Announces Results For Second Quarter 2012; Raises 2012 Guidance

Stocks in this article: RNF

With the early completion of the DEF phase of the project, Rentech Nitrogen is currently converting a portion of its existing urea stream into DEF sooner than anticipated. The partnership is selling DEF to Yara North America under a long-term agreement at prices which are currently at a premium to urea used for agricultural purposes. The agreement provides Yara with the exclusive rights to purchase DEF produced at Rentech Nitrogen’s facility based on index pricing and distribute the DEF through its national distribution capabilities under the Air1® brand.

Ammonia Production and Storage Expansion

The expansion project at the facility in East Dubuque, which is expected to increase production of ammonia for sale or upgrade to other products by approximately 23%, or 70,000 tons annually, and to increase on-site ammonia storage capacity by approximately 20,000 tons, is progressing on schedule and within budget. The estimated $100 million expansion project, which is being financed by a multiple-draw capital expenditure loan facility, is scheduled to be completed by the end of 2013.

Conference Call with Management

The partnership will hold a conference call on Friday, August 10, 2012 at 10:00 a.m. PDT, during which time senior management will review the partnership’s financial results for this period and provide an update on the business. Callers may listen to the live presentation, which will be followed by a question and answer segment, by dialing 800-897-4057 or 212-231-2922. An audio webcast of the call will be available at www.rentechnitrogen.com within the Investor Relations portion of the site under the Presentations section. A replay will be available by audio webcast and teleconference from 12:00 p.m. PDT on August 10 through 12:00 p.m. PDT on August 17. The replay teleconference will be available by dialing 800-633-8284 or 402-977-9140 and the reservation number 21598511.

Rentech Nitrogen Partners, L.P.

Consolidated Statements of Operations

(Stated in Thousands, Except per Unit Data)

                                       
For the Three Months For the Six Months
Ended June 30, Ended June 30,
  2012     2011     2012     2011  
(unaudited) (unaudited)
Total Revenues $ 70,643 $ 74,385 $ 109,116 $ 98,328
Cost of Sales   24,997     36,958     40,898     50,700  
Gross Profit 45,646 37,427 68,218 47,628
 
Selling, general and administrative expense 3,884 1,478 6,474 2,604
Depreciation 83 93 636 202
(Gain) loss on disposal of property, plant and equipment   75     (26 )   47     (72 )
Operating Expenses   4,042     1,545     7,157     2,734  
Operating Income 41,604 35,882 61,061 44,894
Other Income (Expense), Net
Interest income 14 10 30 27
Interest expense (42 ) (3,280 ) (142 ) (6,319 )
Loss on debt extinguishment - (9,223 ) - (9,223 )
Loss on interest rate swaps (580 ) - (580 ) -
Other income (expense), net   232     (12 )   232     1  
Total Other Expenses, Net   (376 )   (12,505 )   (460 )   (15,514 )
Income Before Income Taxes 41,228 23,377 60,601 29,380
Income tax expense - 9,620 - 12,090
Net Income $ 41,228   $ 13,757   $ 60,601   $ 17,290  
 
Net Income per Common Unit - Basic $ 1.08 $ 1.58
Net Income per Common Unit - Diluted $ 1.08 $ 1.58
 
Weighted-Average Units:
Basic   38,253     38,251  
Diluted   38,279     38,272  
 

Rentech Nitrogen Partners, L.P.

Balance Sheet Data

(Stated in Thousands)

                       

As of June 30, 2012

As of December 31, 2011

Cash and Cash Equivalents $ 44,441 $ 44,836
Working Capital 47,249 31,645
Construction in Progress 32,435 7,062
Total Assets 162,156 130,443
Credit Facilities 20,190 -
Total Long-Term Liabilities 21,025 277
Total Partners' Capital 119,959 99,191
 

Key Operating Statistics:

                   
 

Three Months Ended June 30,

Six Months Ended June 30,

2012             2011   2012             2011  
 
Production Tons (in thousands)
Ammonia 77 68 155 143
Ammonia Available for Sale

(included in line above)

37 30 75 65
UAN 78 79 161 160
Other Products (excludes CO 2) 76 73 153 146
 

Delivered Tons (in thousands)

Ammonia

40 43 70 63
UAN 92 129 126 159
Other Products (excludes CO 2) 13 15 26 27
 
Average Price per Delivered Ton
Ammonia $695 $638 $686 $628
UAN $378 $312 $365 $292
 
Natural Gas
Natural Gas Used in Production

(Million MMBtu)

2.8 2.6 5.6 5.4
Average Natural Gas Cost perMMBtu, including transportationcost $3.12 $4.59 $3.67 $4.72
 
Natural Gas Cost in Cost of Sales
(Million MMBtu) 3.0 3.9 4.9 5.3
Average Natural Gas Cost perMMBtu, including transportationcost $3.64 $4.71 $3.95 $4.80
 
On-Stream Rates:

Ammonia

100.0 % 100.0 % 100.0 % 100.0 %
UAN 100.0 % 100.0 % 100.0 % 100.0 %

The respective on-stream factors for the ammonia and UAN plant equal the total days the applicable plant operated in any given period, divided by the total days in that period.

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