CVR posts loss on low prices, East Dubuque acquisition

OREANDA-NEWS. July 29, 2016. US UAN and ammonia producer CVR Partners posted a \\$17mn loss in the second quarter, down from a \\$27mn profit a year earlier amid lower sales prices and added expenses related to its [acquisition]( http://direct.argusmedia.com/newsandanalysis/article/1215025) of Rentech's East Dubuque, Illinois, plant.

CVR's loss comes despite higher production and sales volumes for UAN and ammonia. CVR produced 171,500st of ammonia in the quarter, 45,600st of which was for sale, up from 107,100st and 4,400st, respectively, a year earlier. UAN production increased to 296,500st, up by 43,000st year-over-year. CVR sold 339,400st of UAN in the quarter, a 36pc year-over-year increase, while ammonia sales volumes jumped significantly to 73,600st from 6,300st a year ago.

CVR's average sales prices fell for both UAN and ammonia. Ammonia prices dropped to \\$417/st in the second quarter from \\$546/st a year earlier. UAN prices fell to \\$199/st from \\$269/st in the same year-over-year time frame.

Prices for petroleum coke, the feedstock at CVR's Coffeyville, Kansas, facility, fell from \\$25/st in the second quarter of 2015 to \\$12/st in the second quarter of 2016. Natural gas feedstock costs at East Dubuque stood at \\$2.41/mmBtu. The Coffeyville plant operated at 96.6pc on-stream for ammonia and 93.7pc for UAN in the quarter. East Dubuque operated at 68.6pc for ammonia and 69.1pc for UAN as CVR completed a full turnaround of the facility. After the turnaround, the plant is now producing more than 1,000 st/day of ammonia, up by more than 75 st/day from prior rates, thanks to a new ammonia converter.

CVR Partners acquired the East Dubuque plant in April. The firm utilized a \\$645mn bond offering, including refinancing debt, to complete the acquisition.

"With the acquisition and refinancing behind us we are focused on running our business at the lowest possible cost and maximizing our marketing and logistics' capabilities within an expanded geographic footprint," CVR Partners chief executive Mark Pytosh said.