Rentech Nitrogen Partners, L.P. (NYSE: RNF) announced today that its Board of Directors has declared a cash distribution of $0.05 per common unit for the fourth quarter of 2013, payable on February 28, 2014 to holders of record as of February 24, 2014. This distribution will bring cumulative cash distributions for the twelve months ended December 31, 2013 to $1.67 per unit. The $0.05 per unit fourth quarter distribution compares to the Partnership’s existing guidance of a distribution as low as zero.
The Partnership’s results for 2013 were heavily affected by significant unanticipated declines in nitrogen prices, which ended the year 20% to 30% below price levels at the beginning of the year. Unusually high volumes of low-priced urea exports from China drove down prices of urea and of competing nitrogen products, and a very wet spring application period throughout our U.S. markets delayed and reduced demand for products. Several factors have improved the balance of global supply and demand, including the closing of China’s low-tariff export window in late October, and strong urea demand from India. As a result, urea prices began to stabilize entering the 2013 fall application period, followed by increases in the prices of urea and other nitrogen products to their current levels.
Rentech Nitrogen’s results for the fourth quarter were also affected by previously-disclosed production limitations at both of the Partnership’s facilities, which resulted in lost revenue and increased costs. The Pasadena Facility was off-line for approximately 2.5 weeks in December 2013 to conduct scheduled debottlenecking and reliability improvement projects, which, when combined with several small unplanned disruptions in the quarter, contributed to lower production and higher per-unit cost of sales. The Partnership expects that the projects completed in December will increase production and improve on-stream factors in the future. The East Dubuque Facility operated at reduced rates following the scheduled 2013 bi-annual turnaround in early October after the discovery of the need for repairs to the foundation of one of its syngas compressors. In addition, production at the East Dubuque Facility was shut down in late November and much of December 2013 during repairs that followed a fire at the ammonia converter. All of these factors contributed to significantly negative net income and cash available for distribution in the fourth quarter.