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Sep 30, 2021
CF Industries Q3 2021 Earnings Report
CF Industries experienced a net loss in Q3 2021 due to lower ammonia prices and higher natural gas costs, while adjusted EBITDA increased due to strong global demand and decreased supply availability.
Key Takeaways
CF Industries Holdings, Inc. reported a net loss of $185 million for the third quarter of 2021, compared to a net loss of $28 million in the third quarter of 2020. Adjusted EBITDA for the third quarter of 2021 was $488 million, compared to $204 million in the third quarter of 2020. The company's results were impacted by higher natural gas costs and lower production volumes, partially offset by higher average selling prices.
Net sales were $1.362 billion, compared to $847 million in the third quarter of 2020.
Net loss attributable to common stockholders was $185 million, or $0.86 per diluted share, compared to a net loss of $28 million, or $0.13 per diluted share, in the third quarter of 2020.
Adjusted EBITDA was $488 million, compared to $204 million in the third quarter of 2020.
The company is investing in clean energy initiatives, including blue and green ammonia production.
CF Industries
CF Industries
Forward Guidance
Global nitrogen pricing outlook is favorable: high demand/low operating rates due to high energy prices should sustain a tight supply and demand balance into 2023.
Positive Outlook
- Forward curves indicate elevated crop prices through 2023, incentivizing strong global plantings and fertilizer use
- The rebound in global GDP growth and industrial activity has supported increased nitrogen demand
- US International Trade Commission issued an affirmative decision in the preliminary phase of its antidumping and countervailing duty investigations of UAN imports from Russia and Trinidad
- Global demand supported by high crop prices and the need to replenish global stocks
- Corn acres planted in the US in 2022 expected to be ~93 million acres
Challenges Ahead
- Global supply expected to remain constrained with production in key regions affected by high energy prices
- Chinese exports are limited as the Chinese government implemented measures to promote availability/affordability of domestic fertilizer
- Forward natural gas curves in Europe remain high, suggesting a continued challenging commercial environment for regional producers in the near - term
- Energy differentials between Europe & Asia to Henry Hub have increased substantially, steepening the global nitrogen cost curve
- Forward curves suggest favorable energy spreads will persist into 2023