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Dec 31, 2020
LSB Industries Q4 2020 Earnings Report
LSB Industries reported Q4 2020 results with increased sales volume and adjusted EBITDA despite pricing headwinds.
Key Takeaways
LSB Industries reported a 31% increase in net sales and a 44% increase in adjusted EBITDA for the fourth quarter of 2020, driven by stronger production and sales volumes, which offset weaker pricing and the impact of COVID-19. The company also achieved record production volumes for ammonia and UAN for the full year 2020.
Net sales increased by 31% due to stronger sales volumes, partially offset by an 11% decrease from weaker pricing compared to Q4 2019.
Adjusted EBITDA increased by 44% due to stronger production and sales volumes, offsetting the negative impacts of weaker pricing and COVID-19.
Fertilizer sales volumes increased by 64%, including a 105% increase in UAN sales volumes, compared to Q4 2019.
The company delivered record production volumes for ammonia (827,000 tons) and UAN (501,000 tons) for the full year 2020.
Forward Guidance
The company expects to deliver year-over-year improvement in production and sales volumes, which is expected to translate into improved adjusted EBITDA and cash flow for the year. They also anticipate refinancing existing debt at more favorable terms and are developing a strategy to enter the clean energy market through green ammonia production.
Positive Outlook
- Expect year-over-year improvement in production and sales volumes.
- Anticipate improved adjusted EBITDA and cash flow for the year.
- Expect to refinance existing debt at more favorable terms.
- Developing a strategy to enter the clean energy market through green ammonia production.
- Fertilizer market dynamics are strengthening, leading to higher prices.
Challenges Ahead
- Turnaround of approximately 30 days for the Cherokee facility during the third quarter will impact sales volumes.
- Industrial sectors are not yet operating at pre-pandemic levels, putting selling price pressure on certain products.
Historical Earnings Impact
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