Rentech Nitrogen continues to expect 2013 to benefit from market dynamics similar to those of 2012. The impact of the drought on ending corn stocks will likely result in continued high prices and significant acres planted next year. Multiple forecasting services are projecting corn plantings to exceed 96 million acres next year. Low corn inventories should drive corn pricing throughout the year and support strong fertilizer demand. Current posted product prices for spring 2013 delivery are $810 per ton for ammonia and $360 per ton for UAN.
Rentech Nitrogen expects the recently acquired Pasadena facility to generate approximately $20 million in operating income and approximately $25 million in EBITDA in 2013, excluding one-time integration and transition costs. Further explanation of EBITDA, a non-GAAP financial measure, and a reconciliation of the plant’s forecasted EBITDA to operating income have been included below in this press release.
The Pasadena facility is expected to be accretive to cash distributions per unit beginning in 2013.
The East Dubuque facility will undergo its next bi-annual turnaround during the fall of 2013. The turnaround is anticipated to take up to four weeks, which is longer than the typical 18 to 25 days, due to the fact that the final tie-ins for the ammonia production capacity expansion will occur during the 2013 turnaround to minimize plant downtime. During the turnaround, the plant’s ammonia and UAN units will be off-line and therefore ammonia and UAN production and sales volumes during 2013 are expected to be lower than in 2012. Approximately $3 to $5 million of costs for work related to the turnaround are anticipated to be included in cost of sales in the fall of 2013.
The ongoing urea production capacity expansion project at the East Dubuque facility is on schedule to be completed by the end of 2012. The expansion is now expected to increase urea production by approximately 14% or 19,250 tons annually, an increase from the previous estimate of 13% or 17,500 tons annually. The capital budget for this project, which includes completed work relating to the DEF expansion, is now estimated at approximately $7 million, up from an estimated $6 million.