Rentech Nitrogen Partners, L.P. (NYSE:RNF), which manufactures and sells nitrogen fertilizer products including ammonia, urea ammonium nitrate solution (UAN) and ammonium sulfate (AS), today announced its results for the three and nine months ended September 30, 2012.
Agrifos LLC Acquisition
On November 1, 2012, Rentech Nitrogen acquired all of the membership interests of Agrifos LLC, which owns a fertilizer production facility in Pasadena, Texas, that produces primarily ammonium sulfate fertilizer. The acquisition is expected to be accretive to per unit cash available for distribution beginning in 2013.
The acquired Pasadena facility is the third largest producer of ammonium sulfate fertilizer as well as the largest producer of synthetic granulated AS in North America. The plant’s other products include ammonium thiosulfate fertilizer, or ATS, and sulfuric acid, or SA. The plant uses ammonia and sulfur as raw materials to produce these products. Product margins and seasonality of sales are generally less variable than those of ammonia and UAN, with premium pricing received for the plant’s superior quality AS product. The products are sold through distributors to customers within the U.S. and Brazil. AS and ATS are typically blended with other nitrogen, phosphate, and potash fertilizers for application to a variety of crops to maximize yields and maintain nutrient balance within crops. SA is utilized for industrial purposes. The Pasadena facility and site provide a number of opportunities for growth in cash flow expected to be provided by the facility.
Results for the three and nine months ended September 30, 2012 and 2011 exclude those of Agrifos LLC, since Agrifos was acquired subsequent to September 30, 2012.
Three months ended September 30, 2012
Revenues for the three months ended September 30, 2012 were $60.1 million, compared to $38.6 million for the comparable period in the prior year. This increase in revenues was primarily due to increased sales volume for all products, except for nitric acid, sales of which remained unchanged. The timing of product shipments during the three months ended September 30, 2011 was affected by the 2011 turnaround. With fewer tons available for sale last year, Rentech Nitrogen secured a larger percentage of sales for delivery in the fourth quarter of 2011, which resulted in reduced deliveries in the third quarter of last year. The warm, dry weather during the second quarter of 2012 reduced UAN sales volume, resulting in additional product available for delivery in the third quarter of 2012.