LSB Swings to Loss as Turnaround Costs Climb
Adjusted EBITDA rose 38.8% as stronger nitrogen pricing offset lower production.
LSB Industries (LXU), the nitrogen-products maker, swung to a $6.2 million second-quarter loss as planned maintenance weighed on production and GAAP profitability.
The quarter marked a split between pricing-driven sales growth and the costs of completing the El Dorado turnaround while accelerating work at Pryor. Turnaround expenses climbed to $28.8 million from $2.6 million a year earlier, accounting for the divergence between the GAAP loss and higher adjusted EBITDA.
Net sales rose 11.1% to $168.1 million from $151.3 million, while diluted results fell to a loss of $0.09 a share from earnings of $0.04 a share. Gross profit dropped 50.5% to $11.5 million, narrowing gross margin to about 6.8% from 15.3%, and operating results swung to a $2.7 million loss from income of $10.5 million.
Adjusted EBITDA increased to $53.1 million from $38.3 million, expanding the adjusted margin to about 31.6% from 25.3%. Compared with the fourth quarter of 2023, sales edged up from $165.0 million, though adjusted EBITDA slipped from $54.1 million and earnings reversed from net income of $16.1 million.
Higher prices more than offset a 9% decline in total product volume. UAN sales rose 20% to $62.5 million as a 41% increase in average selling price outweighed a 14% volume decline, while ammonia sales fell only 5% despite a 46% drop in volume because its average selling price climbed 78%.
Product mix shifted toward ammonium nitrate and nitric acid amid tight markets. Sales of those products rose 13% to $69.5 million as volume increased 11% and average selling price gained 2%; lower feedstock costs also provided an offset, with average natural-gas cost declining 15% to $2.96 per MMBtu.
LSB agreed in May to assume full ownership of the El Dorado carbon-capture project. The company targets first-quarter 2027 operation, subject to EPA approval, and expects the project to capture 400,000 to 500,000 metric tons of carbon dioxide annually and produce $25 million to $30 million in annual earnings when fully operational.
The company ended June with about $218.0 million of cash, equivalents and short-term investments, up from $148.5 million at year-end, while total debt remained nearly unchanged at $441.3 million.