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Jun 30, 2022
LSB Industries Q2 2022 Earnings Report
LSB Industries reported record operating results, achieving an all-time highest quarterly EBITDA.
Key Takeaways
LSB Industries reported a strong second quarter with significant year-over-year growth in net sales, adjusted EBITDA, and EPS. The company benefited from higher selling prices and strategic commercial initiatives.
Net sales increased to $284.8 million compared to $140.7 million in the second quarter of 2021.
Adjusted EBITDA reached $158.1 million, a significant increase from $46.0 million in the same quarter last year.
Adjusted EBITDA margin improved to 55.5% compared to 32.7% in the second quarter of 2021.
Adjusted EPS was reported at $1.22 for the second quarter of 2022.
LSB Industries
LSB Industries
LSB Industries Revenue by Segment
Revenue by Segment
AN & Nitric Acid Revenue
CapyFin.comAmmonia Revenue
CapyFin.comOther Revenue
CapyFin.com Forward Guidance
Demand for fertilizers should continue to be robust, and fertilizer pricing should remain above historical averages for the rest of 2022, and full year 2023.
Positive Outlook
- Farmer income is likely to continue to be healthy, encouraging investment in fertilizers in order to maximize yield to capitalize on strong corn pricing.
- The elevated corn price environment appears to have the underpinnings to persist given high levels of U.S. ethanol demand and the impact of dry conditions in South America and the Western U.S. on global corn supplies.
- Demand for corn from China for use as animal feed remains high as well.
- Demand for agricultural ammonia could be strong in the fourth quarter, after the harvest, as farmers seek to replenish the nutrients in their soil in advance of the spring 2023 planting season, particularly given the diminished pre-plant application earlier this year.
- U.S. producers remain at a significant production cost advantage and the global ammonia supply constraint should serve as the foundation for continued elevated nitrogen pricing.
Challenges Ahead
- The U.S. corn belt had a very wet spring, causing farmers to forego their typical pre-planting fertilizer application.
- Domestic natural gas prices are well above where they were at this time a year ago.
- Natural gas costs in Europe have rebounded to near the peak levels reached this past March causing ammonia production at some European facilities to shut down again in the face of prohibitively high feedstock costs.
- The current unstable geopolitical situation in that region could potentially disrupt the global supply of these products for the balance of 2022 and 2023.
- Weakening forecasts for economic growth
Revenue & Expenses
Visualization of income flow from segment revenue to net income