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Mar 31, 2022
CF Industries Q1 2022 Earnings Report
CF Industries achieved record quarterly financial results driven by robust global nitrogen demand, limited supply, strong operational performance, and expanded logistics.
Key Takeaways
CF Industries Holdings, Inc. reported first quarter net earnings of $883 million and adjusted EBITDA of $1.65 billion. The company benefited from robust global nitrogen demand, limited supply, strong operational performance and expanded logistics.
First quarter net earnings of $883 million, EBITDA of $1.68 billion and adjusted EBITDA of $1.65 billion.
Trailing twelve months net cash from operating activities of $3.69 billion, free cash flow of $2.80 billion.
North American manufacturing network achieved record first quarter gross ammonia, urea ammonium nitrate (UAN) and diesel exhaust fluid (DEF) production volumes.
Board of Directors increased quarterly dividend by 33 percent to $0.40 per share.
CF Industries
CF Industries
Forward Guidance
Management expects global nitrogen industry dynamics to remain strong for the foreseeable future, with robust global nitrogen demand coupled with tight global nitrogen supply and wide energy differentials between North America and marginal production in Europe and Asia.
Positive Outlook
- Global demand for nitrogen remains robust, underpinned by the need to replenish global grains stocks.
- Low global grains stocks-to-use ratios have driven corn, wheat and other grains futures prices in the U.S. to the highest levels in a decade.
- These crop prices support high levels of grain planting and incentivize optimal fertilizer application.
- Global nitrogen inventory remains extremely tight.
- Energy differentials for Europe and Asia compared to low-cost regions remain significant, steepening the global nitrogen cost curve and increasing margin opportunities for low-cost North American producers.
Challenges Ahead
- Global supply continues to be limited by curtailments in Europe and Asia due to high energy costs.
- Ongoing restrictions on exports of certain nitrogen products from Egypt, Turkey and China.
- Obstacles to nitrogen exports from Russia related to the direct and indirect impact of various sanctions as well as government-imposed export limits.
- Natural gas prices remain elevated due in part to the Russian invasion of Ukraine and the uncertainty about gas flows from Russia.
- Urea exports from China are expected to be limited through at least the first half of 2022 as the Chinese government has implemented measures to discourage urea exports and promote the availability and affordability of fertilizers domestically.