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Sep 30, 2022
CF Industries Q3 2022 Earnings Report
CF Industries reported strong Q3 2022 results driven by strong operational performance and wide energy spreads.
Key Takeaways
CF Industries reported net sales of $2.321 billion and net earnings attributable to common stockholders of $438 million, or $2.18 per diluted share, for the third quarter of 2022. Adjusted EBITDA was $983 million for the quarter. The company is collaborating with ExxonMobil on a carbon capture project and authorized a new $3 billion share repurchase program.
Strong operational performance and wide energy spreads drive record results
Company to collaborate with ExxonMobil on landmark carbon capture project
New $3 billion share repurchase program authorized by the Board through 2025
Average selling prices for 9M 2022 were higher than 9M 2021 due to decreased global supply availability
CF Industries
CF Industries
Forward Guidance
Global nitrogen supply/demand balance to remain tight into 2025 due to agriculture - led demand and forward energy curves that point to persistently high energy prices in Europe and Asia.
Positive Outlook
- The need to replenish global grain stocks, which has supported high prices for corn, wheat, canola, continues to drive global nitrogen demand
- North America: high crop futures prices and healthy farm economics are projected to support high corn and wheat planted acres in 2023
- India : expected to tender for urea throughout the remainder of the year and into 2023 to fully meet increased demand as farmers maximize grain production
- Production economics continue to favor importing ammonia to manufacture upgraded products for facilities able to do so
Challenges Ahead
- Global nitrogen supply availability remains constrained as high energy prices in Europe and Asia caused curtailments of ammonia production; an estimated 60% of European ammonia capacity did not operate in Q3 2022
- Europe: production curtailments have led to higher nitrogen imports to the region in 2H 2022; urea imports are well - above typical pace in part to replace lower nitrate supply
- China: urea exports remain low due to government measures to promote domestic availability and affordability;1.5 - 2M metric tons expected for export in 2022
- Russia : ammonia exports in 2022 lower than prior years due to Russia’s invasion of Ukraine; other nitrogen products at near - normal levels
- Forward energy curves suggest production economics in Europe/Asia unlikely to improve in the next two to three years without an increase in nitrogen fertilizer prices