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Sep 30, 2020
CF Industries Q3 2020 Earnings Report
Reported a net loss and decreased sales due to lower average selling prices.
Key Takeaways
CF Industries Holdings, Inc. reported a net loss of $28 million for the third quarter of 2020, compared to a net income of $65 million in the third quarter of 2019. Net sales decreased to $0.8 billion from $1.0 billion in the same period last year, primarily due to lower average selling prices across all segments. The company continues to focus on decarbonizing its global production network and positioning itself at the forefront of clean hydrogen supply.
Third quarter net loss of $28 million, or $0.13 per diluted share.
EBITDA of $196 million; adjusted EBITDA of $204 million.
Net sales in the third quarter of 2020 were $0.8 billion.
Company operations have not experienced pandemic-related disruptions to date.
Forward Guidance
The company expects a consistent global nitrogen outlook for 2021, with positive demand in North America, India, and Brazil. North American nitrogen production facilities are expected to remain at the low-end of the global cost curve due to access to low-cost North American natural gas.
Positive Outlook
- Improved farm economics are expected to support plantings.
- Corn futures prices have increased approximately 30 percent since the end of July.
- Healthy level of corn planting in 2021, as well as expected increases in wheat and canola acreage, is expected to underpin a stable level of nitrogen demand in North America.
- Global nitrogen requirements are expected to remain robust, driven by continued strong demand for urea imports from India and Brazil.
- North American nitrogen production facilities are expected to remain at the low-end of the global cost curve for the foreseeable future due to access to low-cost North American natural gas.
Challenges Ahead
- Chinese anthracite coal-based nitrogen complexes will remain the global marginal urea producer and thus set the global price.
- The price of Chinese anthracite coal has not declined substantially during the COVID-19 pandemic compared to global natural gas prices.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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