GICS Sector : Basic Materials
CVR Partners, LP, together with its subsidiaries, engages in the production and sale of nitrogen fertilizer products in the United States.The company offers ammonia products for agricultural and industrial customers; and urea and ammonium nitrate products to agricultural customers, as well as retailers and distributors.CVR GP, LLC serves as the general partner of the company.
CVR Partners LP reported net sales of $131 million, a net loss of $10 million, and EBITDA of $20 million for the fourth quarter of 2025. The company's actual EPS came out at -$1.7, significantly worse than the estimated -$0.33. The EBITDA decrease was primarily due to lower production and sales volumes and higher direct operating costs associated with the planned turnaround of Coffeyville. Total ammonia production for the quarter was 140,000 gross tons, with 62,000 net tons available for sale.
Publication Date: Feb -22
The company's financial performance was impacted by the planned turnaround and subsequent start-up issues at Coffeyville, resulting in lower UAN and ammonia sales volumes. The Board of Directors declared a fourth-quarter distribution of $0.37 per common unit, indicating a commitment to returning value to shareholders. With a 'P/S Ratio' of 1.76 and an 'EV/EBITDA' of 6.58, the company's valuation appears reasonable, considering the challenges it faced during the quarter.
The company remains optimistic about the spring season, citing strong demand for nitrogen fertilizers due to the record crop year and constrained supply side. Mark Pytosh, CEO, noted that the early start to ammonia application is a good omen for the spring season, as it typically leads to a better outcome. The company has a good book of business, with a strong order book, and expects high utilization at its plants to move product for customers.
The company is focused on improving reliability and redundancy at its plants, with a goal of operating at utilization rates above 95% of nameplate capacity. They are also working on construction and design plans for the feedstock diversification and ammonia expansion project at the Coffeyville facility. As Mark Pytosh mentioned, "the company is confident that the issues have been dealt with, but they are revisiting their business plan with the service provider," indicating a proactive approach to addressing operational challenges.
With a 'Dividend Yield (%)' of 11.83 and a 'P/E Ratio' of 10.8, the company's valuation appears attractive, considering its commitment to returning value to shareholders. The 'ROIC (%)' of 14.68 and 'ROE (%)' of 32.82 indicate a strong return on investment, supporting the company's ability to sustain its dividend payments. Analysts estimate next year's revenue growth at None%, indicating a cautious outlook for the company's top-line performance.
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Growing demand for crop nutrition and plant growth, increasing adoption of precision agriculture, and rising need for sustainable farming practices drive the growth of the UAN market.
Growing demand for ammonia-based fertilizers in agriculture, increasing adoption in industrial applications, and rising natural gas production drive the market growth.
The freight segment of CVR Partners, LP is expected to grow driven by increasing demand for fertilizer and ammonia, expansion of production capacity, and rising transportation costs.
Growing demand for fertilizers in agriculture, increasing adoption of precision farming, and rising industrial applications drive the growth of CVR Partners' Urea Products segment.
The 'Other' segment of CVR Partners, LP is expected to grow driven by increasing demand for nitrogen fertilizers, expansion of the nitrogen fertilizer plant, and diversification of revenue streams through miscellaneous income.
CVR Partners, LP produces nitrogen fertilizers, including ammonia, urea ammonium nitrate (UAN) and ammonium nitrate (AN) for agricultural and industrial applications.
CVR Partners, LP produces sulfuric acid, a strong acid used in various industrial processes.
CVR Partners, LP produces anhydrous ammonia, a key ingredient in the production of nitrogen fertilizers.
CVR Partners, LP produces UAN, a liquid fertilizer used in agriculture.
CVR Partners, LP produces AN, a nitrogen-based fertilizer used in agriculture.
The threat of substitutes for CVR Partners, LP is moderate due to the availability of alternative products and services in the energy industry.
The bargaining power of customers for CVR Partners, LP is low due to the company's strong market position and limited customer concentration.
The bargaining power of suppliers for CVR Partners, LP is moderate due to the presence of multiple suppliers in the energy industry.
The threat of new entrants for CVR Partners, LP is high due to the relatively low barriers to entry in the energy industry.
The intensity of rivalry for CVR Partners, LP is high due to the competitive nature of the energy industry and the presence of several established players.
| Value | |
|---|---|
| Debt Weight | 64.51% |
| Debt Cost | 5.24% |
| Equity Weight | 35.49% |
| Equity Cost | 10.53% |
| WACC | 7.12% |
| Leverage | 181.75% |
Value: 7.3
Growth: 4.7
Quality: 5.9
Yield: 10.0
Momentum: 8.0
Volatility: 8.3
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Value: 6.2
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Momentum: 10.0
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Yield: 10.0
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Growth: 6.3
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Yield: 2.0
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Value: 1.8
Growth: 8.2
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Yield: 0.0
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Value: 8.1
Growth: 1.8
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Volatility: 4.3
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