How are energy investors positioned?
CVR Partners LP (NYSE:UAN) reported strong financial results for the second quarter of 2025, surpassing analysts’ expectations with an earnings per share (EPS) of $3.67. The company’s revenue reached $169 million, slightly above the anticipated $168.56 million. Following the announcement, the stock price increased by 4.91%, closing at $89.55, reflecting positive investor sentiment. According to InvestingPro data, the company maintains a "GREAT" financial health score of 3.02, supported by strong profitability metrics and robust cash flow generation.
Key Takeaways
- CVR Partners exceeded EPS expectations with $3.67 against forecasts.
- Revenue slightly surpassed projections at $169 million.
- The stock price rose by 4.91% in post-earnings trading.
- Ammonia plant utilization was strong at 91%.
- The company plans to expand ammonia capacity by 8%.
Company Performance
CVR Partners demonstrated robust performance in Q2 2025, driven by solid operational metrics and strategic initiatives. The company’s ammonia plant utilization reached 91%, and it produced 197,000 gross tons of ammonia. This performance aligns with a broader industry trend of increased fertilizer demand, partly due to geopolitical factors affecting global supply chains.
Financial Highlights
- Revenue: $169 million, slightly above forecasts.
- Net Income: $39 million.
- EBITDA: $67 million.
- Distribution: $3.89 per common unit.
- Total Liquidity: $162 million, including $114 million in cash.
- Direct Operating Expenses: $60 million.
Earnings vs. Forecast
CVR Partners reported an EPS of $3.67, exceeding market expectations. The revenue of $169 million also slightly surpassed the forecast of $168.56 million. This positive surprise reflects the company’s ability to capitalize on favorable market conditions and operational efficiency.
Market Reaction
Following the earnings announcement, CVR Partners’ stock rose by 4.91%, closing at $89.55. The stock has shown impressive momentum, with InvestingPro data showing a year-to-date return of 23.98% and currently trading near its 52-week high. The company offers a substantial dividend yield of 10.09%, making it particularly attractive to income-focused investors. Based on InvestingPro’s Fair Value analysis, the stock appears to be fairly valued at current levels. The broader market trend for fertilizer companies has been positive, with increased demand and supply chain constraints driving prices.
Outlook & Guidance
Looking ahead, CVR Partners aims to achieve ammonia plant utilization rates of 93-98% in Q3. The company plans to expand its ammonia capacity by 8% and continues to focus on reducing its carbon footprint. Expected direct operating expenses are projected at $60-65 million, with total capital spending between $20-25 million. With a healthy current ratio of 2.5 and strong operational metrics, InvestingPro has identified several additional bullish factors for the company. Subscribers can access the comprehensive Pro Research Report, which provides detailed analysis of UAN’s growth prospects among 1,400+ top US stocks.
Executive Commentary
CEO Mark Pytosh highlighted the company’s strategic positioning, stating, "The U.S. has become an exporter to Europe for ammonia." He also noted the competitive advantage of U.S. production, emphasizing, "Production capacity in the United States is more valuable because we have cheap feedstock, good logistics, and increasingly lower carbon intensity."
Risks and Challenges
- Geopolitical tensions affecting global fertilizer supply.
- Elevated electricity and natural gas costs impacting expenses.
- Potential industry consolidation could alter competitive dynamics.
- Planned maintenance and upgrades may temporarily affect production.
Q&A
During the earnings call, analysts inquired about the extended UAN summer fill season and the impact of elevated electricity and natural gas costs. The company expects minimal price declines for the summer fill and is actively managing cost pressures through efficiency improvements and strategic investments.
Full transcript - CVR Partners LP (UAN) Q2 2025:
Christine, Conference Operator: Greetings, and welcome to the CVR Partners Second Quarter twenty twenty five Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Richard Roberts, Vice President, Financial Planning and Analysis and Investor Relations.
Thank you, sir. You may begin.
Richard Roberts, Vice President, Financial Planning and Analysis and Investor Relations, CVR Partners: Thank you, Christine. Good morning, everyone. We appreciate your participation in today’s call. With me today are Mark Pytosh, our Chief Executive Officer Dane Newman, our Chief Financial Officer and other members of management. Prior to discussing our twenty twenty five second quarter results, let me remind you that this conference call may contain forward looking statements as that term is defined under federal securities laws.
For this purpose, any statements made during this call that are not statements of historical facts may be deemed to be forward looking statements. You are cautioned that these statements may be affected by important factors set forth in our filings with the Securities and Exchange Commission and in our latest earnings release. As a result, actual operations or results may differ materially from the results discussed in the forward looking statements. We undertake no obligation to publicly update any forward looking statement, whether as a result of new information, future events or otherwise, except to the extent required by law. This call also includes various non GAAP financial measures.
The disclosures related to such non GAAP measures, including reconciliations to the most directly comparable GAAP financial measures, are included in our twenty twenty five second quarter earnings release that we filed with the SEC for the period. Let me also remind you that we are a variable distribution MLP. We will review our previously established reserves, current cash usage, evaluate future anticipated cash needs, and may reserve amounts for other future cash needs as determined by our General Partners Board. As a result, our distributions, if any, will vary quarter to quarter due to several factors, including but not limited to, operating performance, fluctuations in the prices received for finished products, capital expenditures, and cash reserves deemed necessary or appropriate by the Board of Directors of our general partner. With that said, I’ll turn the call over to Mark Pintosh, our Chief Executive Officer.
Mark?
Mark Pytosh, Chief Executive Officer, CVR Partners: Thank you, Richard. Good morning, everyone, and thank you for joining us for today’s call. The summarized financial highlights for the 2025 include net sales of 169,000,000 net income of $39,000,000 EBITDA of $67,000,000 and the Board of Directors declared a second quarter distribution of $3.89 per common unit, which will be paid on August 18 to unitholders of record at the close of the market on August 11. For the 2025, our consolidated ammonia plant utilization was 91%, which was impacted by some planned and unplanned downtime at both facilities during the quarter. Combined ammonia production for the 2025 was 197,000 gross tons, of which 54,000 net tons were available for sale and UAN production was 321,000 tons.
During the quarter, we sold approximately 345,000 tons of UAN at an average price of $317 per ton and approximately 57,000 tons of ammonia at an average price of $593 per ton. Relative to the 2024, sales volumes were higher despite lower production volumes driven by a combination of strong demand in 2025 and a larger shift of product deliveries from 2Q into 1Q last year as a result of favorable weather allowing farmers to plant earlier in the year. UAN and ammonia prices increased 1814% respectively from the prior year period driven by robust demand on increased corn plantings and tight inventories across the system. Overall, had another good quarter and we believe the setup is favorable heading into the second half of the year. Domestic and global inventories of nitrogen fertilizer remain tight and that has been supportive of pricing in the summer, which I will discuss further in my closing remarks.
I will now turn the call over to Dane to discuss our financial results.
Dane Newman, Chief Financial Officer, CVR Partners: Thank you, Mark. For the 2025, reported net sales of $169,000,000 and operating income of $46,000,000 Net income for the quarter was $39,000,000 or $3.67 per common unit, and EBITDA was 67,000,000 Relative to the 2024, the increase in EBITDA was primarily due to a combination of higher UAN and ammonia sales pricing and volumes, along with lower Petco feedstock costs. Direct operating expenses for the 2025 were $60,000,000 Excluding inventory impacts, direct operating expenses increased by approximately $6,000,000 relative to the 2024, primarily due to higher natural gas and electricity costs. During the 2025, we spent $11,000,000 on capital projects, which was primarily maintenance capital. We estimate total capital spending for 2025 to be approximately 55,000,000 to $65,000,000 of which 40,000,000 to $45,000,000 is expected to be maintenance capital.
We anticipate a significant portion of the profit and growth capital spending planned for 2025 will be funded through cash reserves taken over the past few years. We ended the quarter with total liquidity of 162,000,000 which consisted of $114,000,000 in cash and availability under the ABL facility of $47,000,000 Within our cash balance of $114,000,000 we had less than $1,000,000 related to customer prepayments for the future delivery of products. In assessing our cash available for distribution, we generated EBITDA of $67,000,000 and had net cash needs of $26,000,000 for interest costs, maintenance capex, and other reserves. As a result, there was 41,000,000 cash available for distribution, and the Board of Directors of our general partner declared a distribution of $3.89 per common unit. Looking ahead to the third quarter of twenty twenty five, we estimate our ammonia utilization rate to be between 9398%, with some downtime planned at East Dubuque for control system upgrades.
We expect direct operating expenses, excluding inventory impacts, to be between 60,000,000 and $65,000,000 and total capital spending to be between 20,000,000 and $25,000,000 With that, I will turn the call back over to Mark.
Mark Pytosh, Chief Executive Officer, CVR Partners: Thanks, Dane. In summary, despite some planned and unplanned downtime, we had a good quarter of operations with ammonia utilization of 91%. Demand for nitrogen fertilizer remained solid through the end of the planting season, and we are seeing the strength in demand continue for the second half of the year with favorable pricing. The spring planting season went well and demand for nitrogen was strong. The USDA estimates that 95,200,000 acres of corn and 83,400,000 acres of soybeans were planted in spring twenty twenty five, a 4% increase for corn and a 3% decrease for soybeans compared to 2024.
Yield estimates are 181 bushels per acre for corn and 52.5 bushels per acre for soybeans. Based on these planting and corn yield estimates, the USDA is projecting inventory carryout levels for 2026 approximately 10% for corn and 7% for soybeans, which are below the ten year averages. Grain prices have softened some recently driven primarily by expectations of large crop production in Brazil and North America in 2025 and potential trade disputes where the purchase of grains may be used as a negotiating tool in reaching trade agreements. December corn prices are approximately $4.15 per bushel and November soybeans are approximately $10 per bushel. Geopolitical conflicts are continuing to impact the nitrogen fertilizer industry.
In the second quarter, Israel attacked Iran and caused the natural gas disruption and the flaring of ammonia inventories in Iran, along with a disruption in natural gas flow to Egypt for an extended period of time. Fertilizer producers in both countries shut in capacity during that time and have only recently begun to ramp up production again. Additionally, Ukraine damaged two nitrogen fertilizer plants in Russia, which reduced product available for export. It is currently unclear when these two plants will resume full production. In total, nearly 20% of global urea export capacity was offline for a period of time in the quarter, while India has been seeking to import urea for its planting season.
All of these factors contributed to a tighter global supply demand balance for nitrogen fertilizers at the end of the planting season and the normal seasonal price declines for summer fill and fall prepay UAN and ammonia have been much narrower this year. In addition to the supply tightness across the fertilizer market, the potential for tariffs on Russian fertilizer exports represents another wildcard that could have significant impacts on pricing in the near term. Natural gas prices in Europe have declined slightly since our last earnings call, but remain around $11 per MMBtu currently, while U. S. Prices continue to range between $3 and $4 per MMBtu.
Europe has refilled its natural gas inventories at a slower rate than expected and there are concerns about the ability to replenish the inventory to targeted levels before 2025. The cost to produce ammonia in Europe has remained durably at the high end of the global cost curve, and production remains below historical levels, which has created opportunities for U. S. Gulf Coast producers to export ammonia to Europe for upgrade. We continue to believe Europe faces structural natural gas supply challenges that will likely remain in effect for 2026.
At our Coffeyville facility, we’re working on a detailed design and construction plan to utilize natural gas and additional hydrogen from the adjacent Coffeyville refinery as alternative feedstocks to third party pet coke. In addition to expanding nameplate ammonia capacity by approximately 8%. We expect to begin implementing the project this fall. To remind everyone, this project would give us the ability to choose the optimal feedstock mix between natural gas and pet coke, and this would make Coffeyville the only nitrogen fertilizer plant in The U. S.
With that feedstock flexibility. We also continue to execute certain debottlenecking projects at both plants that are expected to improve reliability and production rates, including the expansion of our DEF production and load out capacity. The goal of these projects is to support our target of operating our plants at utilization rates above 95% of nameplate capacity, excluding the impact of turnarounds. We have water quality upgrade projects at both plants underway and the electricity reliability upgrade project at Coffeyville is also progressing in partnership with the city. During the upcoming fall turnaround at Coffeyville, we plan to install a nitrous oxide abatement unit after which we will have nitrous oxide abatement units on all four of our nitric acid plants.
This would further our strategy of reducing the carbon footprint of our operations and we are continuing our efforts to have Coffeyville certified at the low carbon nitrogen fertilizer production facility. The funds needed for the twenty twenty five projects are coming from the reserves taken over the last two years and the Board elected to continue reserving capital in the second quarter. While the Board looks at reserves every quarter, I would expect them to continue to elect to reserve some capital and we anticipate holding higher levels of cash related to these projects in the near term as we ramp up execution and spending, which we expect will take place over the next two to three years. We have a planned thirty day turnaround at our Coffeyville facility starting in early October. In addition to the normal open clean inspect of many of our units, we will be replacing the ammonia converter internals and installing the nitrous oxide abatement unit.
The expense for the turnaround is expected to be approximately $15,000,000 and we have the cash to fund the turnaround expenses in reserves. The second quarter continued to demonstrate the benefits of focusing on safety, reliability and performance. In the quarter, we executed on all the critical elements of our business plan, which include safely and reliably operating our plants with a keen focus on the health and safety of our employees, contractors and communities, prudently managing costs, being judicious with capital, maximizing our marketing and logistics capabilities and targeting opportunities to reduce our carbon footprint. Yesterday, our parent company, CVR Energy, announced that its CEO, David Lamp, would be retiring at year end. As part of the transition, I have agreed to take on his role starting on 01/01/2026, in addition to my role as CEO of CVR Partners.
I will continue to focus on having our great team execute CVR Partners’ mission to deliver safe, reliable operations and generate attractive unitholder returns. We aren’t going to lose focus. In closing, I’d like to thank our employees for their safe execution during a few brief outages, achieving 91% ammonia utilization and the solid delivery on our marketing and logistics plans resulting in a distribution of $3.89 per common unit for the second quarter. With that, we are ready to answer any questions. Christine?
Christine, Conference Operator: Thank you. We will now be conducting a question and answer session. Our first question comes from the line of Rob Maguire with Granite Research. Please proceed with your question.
Rob Maguire, Analyst, Granite Research: Good morning, Mark, Dan and Richard.
Mark Pytosh, Chief Executive Officer, CVR Partners: Good morning, Rob. Hey,
Rob Maguire, Analyst, Granite Research: so a couple of questions on UAN. Can you just comment on the timing of your UAN summer fill program? You know, what what what your thoughts are in terms of getting out there? And are you seeing enough strength to hold pricing without needing to offer discount?
Mark Pytosh, Chief Executive Officer, CVR Partners: So, Rob, we have not yet completed the summer UAN fill. We have completed the summer fill and fall prepay for ammonia, but the season was extended into July. There was a lot of demand for UAN at the end of the season, so that went into July and inventories are very low. So fill season got pushed back. We do expect it in the next couple of weeks.
And the prices typically, and you’ve been through this before Rob, but typically would see a pretty good deal, maybe a 25% or 30% decline in price from the in season price to the summer fill. And that percentage decline is going to be a lot less this year. And because of the tightness in the supply demand. So it’s not going to be at season prices, but it won’t be at the big discount that it typically is.
Rob Maguire, Analyst, Granite Research: Okay. I appreciate you getting me on track there. And then is it safe to assume that the third quarter UEM pricing I mean, it’s going to drop, it sounds like, at some point, given the seasonality you just discussed. But I guess, do you have an outlook on ammonia pricing through the fall application? And then would you be open to sharing that?
Mark Pytosh, Chief Executive Officer, CVR Partners: What I would tell you is that the fall pricing was, I’d say, relatively similar to the spring pricing. It depends on the geography, we expect the fall to look a lot like the spring. And again, we would expect that to be a pretty good discount from the spring, but the ammonia, will be priced around where the spring price was for fall.
Rob Maguire, Analyst, Granite Research: Okay. I appreciate that. And then, just switching gears here, direct operating costs increased to $60,500,000 in the second quarter, up from 54,500,000.0 in the first quarter, but the gross ammonia production was down modestly. Was there higher than usual maintenance and repair costs in the second quarter number? And just sort of related to the new control systems installed at East Dubuque, is there any background?
Well, if you could let me know along those lines.
Mark Pytosh, Chief Executive Officer, CVR Partners: Yeah. A couple of factors there. We did have a bunch of repairs go through in the quarter, with the outages that we had, and we did draw on the inventory. So, you know, that would draw out more DOE because we’ve sort of effectively made it in the first quarter and shifted in the second quarter. That would tend to lift the DOE there.
Rob Maguire, Analyst, Granite Research: Got it. And then you guided the third quarter direct operating cost to 60,000,000 to $60,500,000 Can you give me an idea of what the breakdown there is? I think Dave might have talked about that, but just with regards to maintenance versus growth CapEx?
Mark Pytosh, Chief Executive Officer, CVR Partners: That’s for the year.
Rob Maguire, Analyst, Granite Research: For the year.
Mark Pytosh, Chief Executive Officer, CVR Partners: I’ll let Dave answer. You’re saying CapEx or DOE?
Rob Maguire, Analyst, Granite Research: Yeah, I
Dane Newman, Chief Financial Officer, CVR Partners: think we crossed both there. Which one are we looking at?
Rob Maguire, Analyst, Granite Research: The direct operating cost for guidance was 60,000,000 to 65,000,000 I thought.
Dane Newman, Chief Financial Officer, CVR Partners: Yes. So with the as it relates to the DOE, we’re looking at 60,000,000 to $65,000,000 We’re expecting to continue to see the elevated natural gas and electricity costs that we saw in the second quarter. In addition, we have the work on the Clark controls. There’ll be some expense associated with that as well. Outside of that, nothing really abnormal that we would expect in our OpEx for the third quarter.
Mark Pytosh, Chief Executive Officer, CVR Partners: One of the things that we’ve seen this year, Rob, in the summer in particular is elevated electricity pricing. And we haven’t had any brownouts or blackouts, but the pricing that we’re seeing come through at peak demand periods has been higher this year than last year. And so that’s lifted up our DOE a bit and gas is higher year over year. That’ll start to normalize in the second half, but it was higher in the first half. So all of those are kind of they’re all little pieces that add up to the total.
Rob Maguire, Analyst, Granite Research: Thanks. I appreciate that. And then with regards to the unplanned downtime, is is everything okay now or is that part of your expectation of utilization running a little lower? I know you’re going into a turnaround as well.
Mark Pytosh, Chief Executive Officer, CVR Partners: Yeah. The planned part was okay. And we have said on the last call, we’re upgrading our control system for our compressors at our East Dubuque facility, and it requires us to take an outage on the compressor, so that reduces our rate for a period of time until the control system is installed and then, tuned up and brought into operation. But, the unplanned, we had a couple of outages and we dealt with those issues and don’t expect that to recur. But there’s there are always going to be unplanned outages and events, but, we’ve been pretty good about either avoiding them or dealing with them and keeping them as short as possible.
And so we just we had several factors that happened, you know, at Coffeyville and East Dubuque in the quarter. So we lost a few days in both plants.
Rob Maguire, Analyst, Granite Research: Okay. I appreciate that. And by the way, Mark, congratulations on being named the, incoming CEO of PVR as well. And I get you’re gonna do both roles, but do you envision at some point naming a new head to CVR Partners?
Mark Pytosh, Chief Executive Officer, CVR Partners: We’re in the first twenty four hours, so I don’t wanna try to speculate on the go forward there. But CVR Partners is an important part of the family and a valuable asset for CVR Energy. And I intend to continue to manage and follow it closely and do the best that we can to maximize, returns there. Not planning on giving that up in the short run. We have a great team in place and so I can count on them.
And and so I’m gonna you know, at least initially, will start with both roles. So you’re not getting rid of me here, Rob.
Rob Maguire, Analyst, Granite Research: Appreciate that. Uh-huh. We’re glad you’re there. And then with regards to do do you have a view on industry consolidation at this point with the new administration? Do you think they’re a smidge more indulgent towards consolidation?
Mark Pytosh, Chief Executive Officer, CVR Partners: Obviously, this administration seems to be more, I’d say, look more favorably upon consolidation in the context of lowering cost and ultimately lowering cost out to consumers. I’ve always felt like there probably was some more consolidation to occur in the nitrogen fertilizer space. It is a global business and some of the geopolitical events, I think, are causing people to reconsider where they own assets, where they’re a producer. And so it wouldn’t surprise me to see more consolidation down the road. The one thing that we are watching, which is obviously emerged here in the last week, is the, potential merger of Union Pacific and Norfolk Southern.
We think that that may very well open up some new lanes for us that we’re not currently in, I’m not sure there’ll be another merger consideration there like in the BNCSX, but I think that’s a sign of kind of where we are, but it could very well spill into the fertilizer space in terms of more consolidation. And you heard my comments, we The U. S. Has become an exporter to Europe for ammonia. They’re keeping their upgrade plants up and running, but they’re taking more ammonia from The US.
And so I think production capacity in The United States is more valuable because we have cheap feedstock, We have good logistics and, you know, and now with a lot of the carbon capture going on, we’re increasingly lower carbon intensity. So I think The US could be, you know, a durable export exporter of fertilizer, which would make production assets more valuable in The US.
Rob Maguire, Analyst, Granite Research: That’s great. One last question with regards to your brownfield reliability and redundancy projects. Could you give us an idea of where your capacity is today and what those projects will add in terms of volume?
Mark Pytosh, Chief Executive Officer, CVR Partners: Sure. And so what I said in the remarks on Coffeeville, we think we can get somewhere in the ballpark of about 100 tons a day of ammonia production out of the projects that we’ve been talking about for the last few quarters. And at East Dubuque, we’re looking at potential projects that might add 5% plus to our capacity there. So those are and those if you look at what it costs to build new capacity, we’re getting a bargain price for these brownfield projects where we’re adding capacity for a fraction of what it would cost to build actual new production capacity. So they’re great investments for us, because it’s a lot cheaper to build brownfield than it is to try to build a new one.
Rob Maguire, Analyst, Granite Research: That makes sense. And can you just confirm for me, are all those projects maintenance or growth CapEx or a mix?
Mark Pytosh, Chief Executive Officer, CVR Partners: Those are all in the growth what Dane described as the growth CapEx that are being reserved. So that doesn’t we’ve been reserving against that for a period of time, and that doesn’t really come out of the maintenance side of the capital budget. So if you kind of think about reliability, we’re spending our ongoing maintenance dollars to maintain our reliability and address issues, plus addressing what I call bigger bottleneck issues or bigger reliability, single point of failures at the two plants. And that’s those are the dollars that are being reserved in the growth capital. But we get we’re going to get production capacity for that.
So it’s not it’s a combination of reliability plus which just means higher if we operate at higher nameplate capacity, we’re going to have more production plus we’re going to increase the nameplate. So ideally, what we would do is higher percentage of a higher nameplate. That’s the goal.
Rob Maguire, Analyst, Granite Research: That’s great. Thank you so much for all your time in answering my question. Okay. Thank you, Rob.
Christine, Conference Operator: Thank you. We have reached the end of the question and answer session. I’d now like to turn the floor back over to management for closing comments.
Mark Pytosh, Chief Executive Officer, CVR Partners: Wanted again, I want to thank everybody for being on the call today, and we look forward to discussing our third quarter results in October, early November. Thank you very much.
Christine, Conference Operator: Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.