CVR Partners Nearly Doubles Profit as Fertilizer Prices Surge
CVR Partners reported second-quarter net income of $78 million, or $7.33 a unit, more than double the $39 million it earned a year earlier as ammonia prices climbed 33%.
CVR Partners (UAN) reported second-quarter net income of $78 million, or $7.33 a unit, up from $39 million, or $3.67 a unit, in the same period last year, as the nitrogen fertilizer producer benefited from higher prices and a full recovery from a turnaround that had depressed production the prior quarter.
The quarter capped a rapid swing from the trough CVR Partners hit in the fourth quarter of 2024, when a 32-day planned turnaround at its Coffeyville facility and three weeks of third-party air separation unit startup delays cut ammonia production to 140,000 gross tons from 210,000 tons a year earlier and left the partnership with a $10 million net loss. Utilization has since climbed back to 99% in the second quarter of 2025, essentially flat with the first quarter's 103% but up sharply from 91% a year ago.
Net sales rose to $202 million from $169 million a year earlier, and EBITDA increased to $107 million from $67 million. The improvement built on a sequential gain from the first quarter, when net income was $50 million, or $4.72 a unit, and EBITDA was $78 million on net sales of $180 million.
Pricing drove much of the gain. CVR Partners' average realized gate price for ammonia rose 33% year over year to $791 a ton, while UAN gate pricing rose 24% to $392 a ton, both accelerating from the first quarter's 24% and 34% respective gains. Ammonia production volume rose 8.6% to 214,000 gross tons, and UAN output increased to 342,000 tons from 321,000 tons. Lower feedstock costs added to the margin expansion: petroleum coke fell 20.7% to $44.94 a ton and natural gas dropped 13.7% to $2.84 per MMBtu, helping push operating income to $84.8 million from $46.3 million even as cost of sales declined slightly to $109.0 million.
CVR Partners guides third-quarter ammonia utilization to 75%-80%, down from the second quarter's 99%, citing a planned six-week turnaround at its East Dubuque facility beginning in August. The turnaround will also complete a brownfield ammonia expansion that adds roughly 5% of capacity, along with water system upgrades, a detail not disclosed in prior quarters. Capital expenditures reflected the buildup toward that work, rising to $17.3 million from $10.7 million a year earlier, with maintenance capex nearly doubling to $12.25 million from $6.56 million.
The partnership declared a cash distribution of $6.08 a common unit for the second quarter, up from $4.00 a unit in the first quarter and far above the $0.37 a unit declared for the fourth quarter of 2024, when the turnaround-driven loss limited payouts. Cash and cash equivalents nearly doubled to $137.5 million at June 30 from $69.2 million at year-end, while working capital rose to $210.4 million from $117.1 million.
The results extend a trajectory that began with full-year 2024 net income of $99 million, up from $61 million in 2023, when full-year ammonia and UAN gate pricing rose 22% and 27%, respectively. With the East Dubuque turnaround set to trim third-quarter volumes before adding new capacity, CVR Partners is trading a short-term production hit for expanded output heading into the back half of the year.