CVR Energy Swings to Adjusted Profit as Refining Margins Rebound
CVR Energy posted adjusted earnings of $0.34 a share in the second quarter, reversing a $1.24 adjusted loss in the first quarter as refining margins jumped nearly eighty-fold.
CVR Energy (CVI) reported adjusted earnings of $0.34 a share for the second quarter, compared with an adjusted loss of $1.24 a share in the first quarter and a loss of $0.23 a share a year earlier. The Sugar Land, Texas-based refiner and nitrogen fertilizer producer narrowed its net loss attributable to stockholders to $3 million from $192 million in the prior quarter and $114 million a year ago.
The turnaround centered on the petroleum segment, where adjusted EBITDA swung to $106 million from a $50 million loss in the first quarter and $38 million a year earlier. Refining margin per throughput barrel rose to $9.94 from just $0.12 in the first quarter and $2.21 in the second quarter of 2023, while the adjusted refining margin climbed to $12.43 a barrel from $4.72 and $9.95 in those respective periods. Crude utilization reached 98.4%, up from 97% in the first quarter and 76.9% a year earlier, even as total throughput held roughly flat sequentially at 212,965 barrels a day versus 214,268 barrels a day in the first quarter. Direct operating expenses per throughput barrel fell to $5.93 from $6.10 and $6.45 in the comparable periods.
Companywide adjusted EBITDA reached $209 million, up from $37 million in the first quarter and $99 million a year earlier. The nitrogen fertilizer segment contributed adjusted EBITDA of $107 million, up from $78 million in the first quarter and $67 million a year earlier, as ammonia utilization rose to 99% from 91% a year ago and prices strengthened to $791 a ton for ammonia and $392 a ton for UAN, from $687 and $343 in the first quarter. Sales volumes moved the other way: ammonia volumes fell to 54,000 tons from 73,000 tons in the first quarter, and UAN volumes slipped to 333,000 tons from 345,000 tons a year earlier, even as UAN volumes rose sequentially from 310,000 tons.
Free cash flow turned to a positive $264 million from a $12 million deficit a year earlier, aided by a drop in capitalized turnaround spending to $1 million from $24 million in the second quarter of 2023. Cash and cash equivalents grew to $737 million at June 30 from $511 million at the end of December, while total debt edged up to $1.8 billion from $1.765 billion. Net income attributable to noncontrolling interest more than doubled to $49 million from $24 million a year earlier, reflecting the stronger fertilizer results flowing to CVR Partners' public unitholders.
For the third quarter, CVR Energy guided petroleum throughput to a range of 205,000 to 220,000 barrels a day and crude utilization to 95% to 100%. Ammonia utilization is guided down to 75% to 80% because of a planned turnaround at the East Dubuque facility beginning in August, which is expected to expand ammonia production capacity by approximately 5%.
CVR Energy held its quarterly dividend at $0.10 a share for a third straight quarter, while CVR Partners raised its distribution to $6.08 a unit from $4.00 a unit in the first quarter.