Rentech Nitrogen Partners, L.P. (NYSE: RNF), which manufactures and sells nitrogen fertilizer products including ammonia, UAN solution and ammonium sulfate, today announced its results for the three and six months ended June 30, 2013, and updated its 2013 guidance.
Commenting on the results for the period, D. Hunt Ramsbottom, CEO of Rentech Nitrogen GP, LLC, stated, “We reported good results this quarter, considering that demand and product prices were softer than forecasted, with unfavorable spring weather and significant offshore urea supplies affecting the entire industry.” Mr. Ramsbottom continued, “We took advantage of market liquidity and demand during the past month and have locked-in nearly all of the East Dubuque Facility’s forecasted deliveries for the year at competitive prices. We’re also seeing a rebound of product margins at the Pasadena Facility, from the lower levels earlier this summer when product prices had dropped faster than input prices embedded in our cost of sales, and we had to absorb lower margins on some higher cost inventories carried over from the delayed spring season.”
Mr. Ramsbottom added, “While commodity prices can fluctuate, as we’ve recently seen, we believe that the nitrogen market remains fundamentally healthy. Factors such as farmer affordability of nitrogen and the expectation that we’ll continue to see strong planted corn acres next year are expected to result in good nitrogen demand. We also continue to receive premium pricing for our two primary products, ammonia and ammonium sulfate. For these reasons, our expansion projects for these two product lines are still expected to generate strong returns once they are on-stream at the end of this year.”
Three months ended June 30, 2013
Revenues for the three months ended June 30, 2013 were $104.0 million, compared to $70.6 million for the comparable period in the prior year. Revenues increased due to the contribution of $42.2 million from the facility in Pasadena, Texas (Pasadena Facility), partially offset by a 13% decline in revenues from the facility in East Dubuque, Illinois (East Dubuque Facility). Product deliveries from both facilities were negatively affected by a wet spring season which resulted in a delayed and abbreviated planting season and less nitrogen demand. Results of the quarter were further affected by significant increases in exports of urea from China that negatively impacted urea and other nitrogen prices. Lower urea prices also prompted some late season switching from UAN to urea due to the relative value of the two fertilizers.