Rentech, Inc.

Published : August 11th, 2015

Rentech Nitrogen Partners, L.P. Announces Results for the Second Quarter 2015; Cash Distribution of $1.00 per Unit

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Keywords :   Brazil | Growth | Market | Natural Gas |

Rentech Nitrogen Partners, L.P. Announces Results for the Second Quarter 2015; Cash Distribution of $1.00 per Unit


Rentech Nitrogen Partners, L.P. Announces Results for the Second Quarter 2015; Cash Distribution of $1.00 per Unit

Expects Cash Distributions for 2015 of Approximately $2.00 per Unit

LOS ANGELES--(BUSINESS WIRE)--Aug. 11, 2015-- Rentech Nitrogen Partners, L.P. (NYSE:RNF) today announced financial and operating results for the three and six months ended June 30, 2015. The partnership also announced a cash distribution of $1.00 per unit for the second quarter of 2015.

Keith Forman, CEO of Rentech Nitrogen, said, "Our second quarter results exceeded our expectations. Favorable weather at the beginning of the spring application period resulted in strong demand for ammonia and ammonium sulfate. In addition, I'm pleased to see the Pasadena facility generate another quarter of positive EBITDA. We are well on our way to generating EBITDA in the range of $10 million at Pasadena this year."

Mr. Forman continued, "We are forecasting 2015 to be our second best year since going public, with cash distributions for the year of approximately $2.00 per unit and consolidated EBITDA of about $118 million."

Mr. Forman added, "We are excited about the merger with CVR Partners that was announced yesterday, and we continue our process to sell the Pasadena facility separately."

Three Months Ended June 30, 2015

Revenues for the second quarter of 2015 were $109.9 million, compared to $113.6 million in 2014. Gross profit for the second quarter of 2015 was $44.7 million, compared to $28.2 million for the same period last year. Adjusted EBITDA for the second quarter of 2015 was $47.7 million, compared to $30.7 million in the corresponding 2014 period. A further explanation of Adjusted EBITDA, a non-GAAP financial measure, as used here and throughout this press release appears below.

During the second quarter of 2015, Rentech Nitrogen recorded an asset impairment charge of $101.8 million for the Pasadena Facility, due to our conclusion that our process to evaluate strategic alternatives and the announced agreement with CVR Partners made it more likely than not that the facility would be sold or otherwise disposed of before the end of its previously estimated useful life. This conclusion requires that the estimate of future cash flows used to calculate the fair value of the facility must include estimated sale proceeds and interim cash flows leading up to the sale.

Net loss for the second quarter of 2015 was $(66.2) million, or a loss of $(1.70) per basic unit. This compares to net loss of $(8.9) million, or a loss of $(0.23) per basic unit, for the prior year period. Net income was $35.6 million, or $0.92 per unit, for the quarter ended June 30, 2015, excluding the loss due to the Pasadena asset impairment. This compares to net income $18.3 million, or $0.47 per unit, for the prior year period, excluding an impairment to Pasadena goodwill.

East Dubuque Facility

Revenues for the second quarter of 2015 were $72.1 million, compared to $73.9 million for the same period last year. The decrease was primarily due to lower sales volumes and prices for UAN, partially offset by higher sales volumes and prices for ammonia.

Ammonia deliveries increased due to strong demand from agricultural and industrial customers leading into the spring planting season. Volumes were low in 2014 because production was interrupted by a planned turnaround and a fire in the fourth quarter of 2013. Volumes were also higher in 2015 as a result of operating at expanded rates following the completion of the ammonia capacity expansion. UAN deliveries decreased due to greater demand for ammonia and lower priced urea, and wet conditions during the UAN application period.

Average sales prices per ton for the second quarter of 2015 were 6% higher for ammonia and 7% lower for UAN, as compared with the same period last year. These two products comprised 88% of our East Dubuque Facility's revenues for the second quarter of 2015 and 88% for the same period in the prior year. The increase in ammonia prices is due primarily to an increase in demand due to ideal conditions for applying ammonia. The decrease in UAN prices is due primarily to lower demand for UAN.

Gross profit was $42.7 million for the second quarter of 2015; this compares to $33.0 million for the same period last year. Gross profit margin for the second quarter of 2014 was 59%, compared to 45% for the same period last year. The increases in gross profit and gross margin were primarily due to higher sales volumes and prices for ammonia, business interruption insurance proceeds of $4.4 million related to the 2013 fire and unrealized gains on natural gas derivatives, partially offset by lower sales volumes and prices for UAN. Gross profit margin, without business interruption insurance proceeds and natural gas derivatives, was 51% for the second quarter of 2015, compared to 45%, without natural gas derivatives, for the same period in the prior year.

Adjusted EBITDA for the second quarter of 2015 was $46.6 million, compared to $36.8 million in the corresponding period in 2014.

Net income was $41.2 million for the second quarter of 2015, compared to $31.6 million for the same period last year.

Pasadena Facility

Revenues for the second quarter of 2015 were $37.8 million, compared to $39.7 million for the same period last year. The decrease was due to lower sales volumes for ammonium sulfate and ammonium thiosulfate, and lower sales prices for sulfuric acid, partially offset by higher sales prices for ammonium sulfate and ammonium thiosulfate, and higher sales volumes for sulfuric acid.

Average sales prices per ton increased for ammonium sulfate by 35% and decreased by 12% for sulfuric acid for the second quarter of 2015, as compared with the same period last year. These two products comprised 91% of our Pasadena Facility's revenues for the second quarter of 2015 and 93% for the same period in the prior year. Ammonium sulfate sales prices increased due to a higher percentage of sales in the domestic market; continued demand for ammonium sulfate as retailers move away from ammonium nitrate; and production issues at other North American facilities. As part of our restructuring plan, we reduced our historically low-margin sales to Brazil. No ammonium sulfate sales were made to Brazil during the second quarter of 2015, while 36% of ammonium sulfate sales were to Brazil during the second quarter of 2014.

The higher sales volumes for sulfuric acid and lower sales volumes for ammonium sulfate were the result of our restructuring plan implemented in late 2014. In addition to reducing sales to Brazil, the restructuring plan included reducing expected annual production of ammonium sulfate by approximately 25%, to 500,000 tons. Sulfuric acid is a component in the production of ammonium sulfate. With reduced production of ammonium sulfate, less sulfuric acid is needed, which results in more sulfuric acid being available for sale.

During the second quarter of 2015, the sulfuric acid plant operated at reduced rates, due to a crack on the boiler exit duct. The crack was repaired during planned downtime in July 2015, and the sulfuric acid plant has subsequently operated at full rates.

Gross profit was $2.0 million for the second quarter of 2015, compared to a gross loss of $(4.7) million for the same period last year. Gross profit margin for the second quarter of 2015 was 5% compared to a gross loss margin of (12%) for the same period last year. The increases in gross profit and gross profit margins were primarily due to higher sales prices for ammonium sulfate and ammonium thiosulfate, higher sales volumes for sulfuric acid, lower operating costs due to the restructuring and a decrease in the write down of inventories.

Adjusted EBITDA for the second quarter of 2015 was $3.4 million, compared to an Adjusted EBITDA loss of $(3.8) million in the corresponding period in 2014.

The Pasadena Facility incurred an asset impairment charge of $101.8 million in the second quarter of 2015. The impairment reduced property, plant and equipment by $81.3 million and eliminated intangible assets by $20.5 million. In the corresponding period last year, the facility incurred a goodwill impairment of $27.2 million, which eliminated all the remaining goodwill associated with the facility.

Net loss was $(99.5) million for the second quarter 2015, compared to a net loss of $(33.5) million for the same period last year. Net income was $2.2 million for the second quarter of 2015, excluding the loss due to the asset impairment. This compares to a net loss of $(6.3) million, for the prior year period, excluding the goodwill impairment.

Six Months Ended June 30, 2015

Revenues for the six months ended June 30, 2015 were $179.0 million, compared to $169.9 million for the prior year period. Gross profit for the six months ended June 30, 2015 was $63.5 million, compared to $42.0 million in the prior year period. Adjusted EBITDA for the six months ended June 30, 2015 was $66.8 million, compared to $42.2 million for the prior year period.

During the six months ended June 30, 2015, Rentech Nitrogen recorded an asset impairment charge of $101.8 million for the Pasadena Facility, due to our conclusion that our process to evaluate strategic alternatives and the announced agreement with CVR Partners made it more likely than not that the facility would be sold or otherwise disposed of before the end of its previously estimated useful life. This conclusion requires that the estimate of future cash flows used to calculate the fair value of the facility must include estimated sale proceeds and interim cash flows leading up to the sale.

Net loss for the six months ended June 30, 2015 was $(57.3) million, or $(1.47) per unit. This compares to a net loss of $(5.8) million, or $(0.15) per basic unit, for the prior year period. Net income was $44.5 million, or $1.15 per unit, for the six months ended June 30, 2015, excluding the Pasadena asset impairment. This compares to $21.4 million, or $0.55 per unit, for the prior year period, excluding an impairment to Pasadena goodwill.

East Dubuque Facility

Revenues for the six months ended June 30, 2015 were $108.8 million, compared to $102.4 million for the same period last year. The increase was primarily due to higher sales volumes and prices for ammonia, partially offset by lower sales volumes and prices for UAN, and lower natural gas sales.

Average sales prices per ton for the six months ended June 30, 2015 were 3% higher for ammonia and 5% lower for UAN, compared with the same period last year. These two products comprised 85% of our East Dubuque Facility's revenues for the six months ended June 30, 2015 and 80% for the same period last year.

Gross profit was $60.1 million for the six months ended June 30, 2015, compared to $45.4 million for the same period last year. Gross profit margin was 55% for the six months ended June 30, 2015, compared to 44% for the prior year period. The increases in gross profit and gross margin were primarily due to higher sales volumes and prices for ammonia, business interruption insurance proceeds of $4.4 million and unrealized gains on natural gas derivatives, partially offset by lower sales volumes and prices for UAN. Gross profit margin, without business interruption insurance proceeds and natural gas derivatives, was 47% for the six months ended June 30, 2015, compared to 45%, without natural gas derivatives, for the same period in the prior year.

Adjusted EBITDA for the six months ended June 30, 2015 was $65.9 million, compared to $50.2 million for the prior year period.

Net income was $57.2 million for the six months ended June 30, 2015, compared to $42.8 million for the prior year period.

Pasadena Facility

Revenues for the six months ended June 30, 2015 were $70.2 million, compared to $67.5 million for the same period last year. The increase was due to higher sales prices for ammonium sulfate and ammonium thiosulfate, and higher sales volumes for sulfuric acid, partially offset by lower sales volumes for ammonium sulfate and ammonium thiosulfate, and lower sales prices for sulfuric acid.

Average sales prices per ton increased by 32% for ammonium sulfate and decreased by 5% for sulfuric acid for the six months ended June 30, 2015, compared to the same period last year. These two products comprised 90% of revenues for the six months June 30, 2015 and 89% for the same period last year.

Gross profit was $3.4 million for the six months ended June 30, 2015, compared to gross loss of $(3.4) million for the same period last year. Gross margin for the six months ended June 30, 2015 was 5%, compared to gross loss margin of (5%) for the same period last year. The increases in gross profit and gross profit margins were primarily due to higher sales prices for ammonium sulfate and ammonium thiosulfate, higher sales volumes for sulfuric acid, a decrease in operating costs due to the restructuring and a decrease in the write down of inventories.

Adjusted EBITDA was $5.4 million for the six months ended June 30, 2015, compared to an Adjusted EBITDA loss of $(3.5) million for the same period last year.

The Pasadena Facility incurred an asset impairment charge of $101.8 million for the six months ended June 30, 2015. The impairment reduced property, plant and equipment by $81.3 million and eliminated intangible assets by $20.5 million. In the corresponding period last year, the facility incurred a goodwill impairment of $27.2 million, which eliminated all the remaining goodwill associated with the facility.

Net loss was $(99.4) million for the six months ended June 30, 2015, compared to a net loss of $(34.3) million in 2014. Net income was $2.4 million for the six months ended June 30, 2015, excluding the loss due to the asset impairment. This compares to a net loss of $(7.1) million, for the six months ended June 30, 2014, excluding the goodwill impairment.

Outlook

Third Quarter 2015 Guidance

Rentech Nitrogen expects results for the third quarter of 2015 to be seasonally low. The partnership provided the following forecast for product deliveries, consumption of inputs and capital expenditures for the third quarter of 2015.

3Q15Forecasted Deliveries (in thousand tons)East Dubuque Facility Ammonia 21 UAN 83 Urea (liquid and granular) 13 Nitric acid 3 Pasadena Facility Ammonium sulfate 169 Sulfuric acid 46 Ammonium thiosulfate 16 Forecasted Consumption in DeliveriesEast Dubuque Facility Natural gas (in million MMBtus) 2.4 Pasadena Facility Ammonia 45 Sulfur 61 Sulfuric acid 173 Maintenance Capital Expenditures (in millions) East Dubuque Facility $ 3.7 Pasadena Facility $ 2.0 Growth Capital Expenditures (in millions)1 East Dubuque Facility $ 5.2

Ammonia converter project $ 4.3 Pasadena Facility $

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Rentech, Inc.

CODE : RTK
ISIN : US7601121020
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Rentech is a producing company based in United states of america.

Rentech is listed in United States of America. Its market capitalisation is US$ 4.6 millions as of today (€ 3.9 millions).

Its stock quote reached its highest recent level on July 22, 2011 at US$ 9.86, and its lowest recent point on October 13, 2017 at US$ 0.20.

Rentech has 23 214 347 shares outstanding.

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