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Jun 30, 2022
CF Industries Q2 2022 Earnings Report
CF Industries reported strong operational performance and wide energy spreads which drove record results.
Key Takeaways
CF Industries Holdings, Inc. reported first half 2022 net earnings of $2.05 billion and adjusted EBITDA of $3.60 billion. The company delivered a strong operational performance and leveraged manufacturing and logistics flexibility to drive outstanding results despite weather-related challenges.
First half net earnings of $2.05 billion, or $9.78 per diluted share and EBITDA of $3.47 billion; adjusted EBITDA of $3.60 billion
Second quarter net earnings of $1.17 billion, or $5.58 per diluted share, and EBITDA of $1.80 billion; adjusted EBITDA of $1.95 billion
Trailing twelve months net cash from operating activities of $4.45 billion, free cash flow of $3.61 billion
Repurchased approximately 6.6 million shares for $590 million during the first half of 2022
Forward Guidance
Management expects the global nitrogen supply-demand balance to remain tight for the foreseeable future, underpinned by resilient agricultural-led demand and uncertainty about global production and export supply availability. Additionally, energy spreads between low-cost producers and marginal production in Europe and Asia are projected to remain historically wide.
Positive Outlook
- The need to replenish global grains stocks is expected to support continued positive demand for nitrogen products.
- Global grains stocks-to-use ratios for 2022/2023 are forecast to be similar to those of 2021/2022, which should sustain continued strength for global grains prices, incentivizing nitrogen fertilizer application.
- Urea consumption in Brazil is forecast to remain strong in 2022, supported by high crop prices, expected high planted corn acres in 2022 and 2023 and improved farm incomes.
- India is expected to tender on a regular basis into 2023 as increased domestic production is unlikely to fully meet increased demand as farmers maximize grain production.
- Energy differentials for Europe and Asia compared to low-cost regions remain significant. This has steepened the global nitrogen cost curve and increased margin opportunities for low-cost North American producers.
Challenges Ahead
Historical Earnings Impact
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Avg. Return Before/After Earnings
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