CF Industries Holdings, Inc. Reports Nine Month 2019 Net Earnings of $438 Million, EBITDA of $1,314 Million
Business Wire•October 30, 2019
DEERFIELD, Ill.--(BUSINESS WIRE)--
Operational Excellence, Low-Cost Production Drive Cash Generation
Positive Industry Fundamentals in Near- and Longer-Term
Trailing 12-Month Net Cash from Operating Activities of $1.5 Billion
CF Industries Holdings, Inc. (CF), a leading global fertilizer and chemical company, today announced results for its third quarter and nine months ended September 30, 2019.
Highlights
Nine month net earnings of $438 million(1), or $1.97 per diluted share; EBITDA(2) of $1,314 million; adjusted EBITDA(2) of $1,285 million
Third quarter net earnings of $65 million(1), or $0.29 per diluted share; EBITDA of $341 million; adjusted EBITDA of $349 million
Trailing 12-month net cash from operating activities of $1,457 million, free cash flow(3) of $830 million
Cash and cash equivalents of $1,019 million on the balance sheet as of September 30, 2019
Company to redeem $750 million in debt by end of year
Repurchased approximately 1.5 million shares during the quarter
Overview of Results
CF Industries Holdings, Inc. today announced for the first nine months of 2019 net earnings attributable to common stockholders of $438 million, or $1.97 per diluted share; EBITDA of $1,314 million; and adjusted EBITDA of $1,285 million. These results compare to the first nine months of 2018 net earnings attributable to common stockholders of $241 million, or $1.03 per diluted share; EBITDA of $1,080 million; and adjusted EBITDA of $1,062 million.
For the third quarter of 2019, net earnings attributable to common stockholders were $65 million, or $0.29 per diluted share; EBITDA was $341 million; and adjusted EBITDA was $349 million. These results compare to third quarter 2018 net earnings attributable to common stockholders of $30 million, or $0.13 per diluted share; EBITDA of $308 million; and adjusted EBITDA of $299 million.
“The CF team’s outstanding execution and our company’s position on the low end of the global cost curve continue to drive substantial cash generation and an industry-leading free cash flow yield,” said Tony Will, president and chief executive officer, CF Industries Holdings, Inc. “Over the last 24 months, this superior cash flow generation has enabled us to repay $1.1 billion in debt, with another $750 million to be retired by the end of this year. Additionally, we repurchased more than 16 million shares for $750 million, distributed $550 million in dividends and invested approximately $400 million in growth. We believe our structural and operational advantages, along with positive nitrogen industry fundamentals, will continue to support our cash generation, allowing us to build on this track record in 2020 and beyond.”
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(1)
During the first nine months and third quarter of 2019, certain items impacted our financial results and their comparability to the relevant prior year periods. See the table accompanying this release for a summary of these items.
(2)
EBITDA is defined as net earnings attributable to common stockholders plus interest expense—net, income taxes and depreciation and amortization. See reconciliations of EBITDA and adjusted EBITDA to the most directly comparable GAAP measures in the tables accompanying this release.
(3)
Free cash flow is defined as net cash from operating activities less capital expenditures and distributions to noncontrolling interests. See reconciliation of free cash flow to the most directly comparable GAAP measure in the table accompanying this release.
Operations Overview
CF Industries continued to operate safely and efficiently. As of September 30, 2019, the company’s 12-month rolling average recordable incident rate was 0.61 incidents per 200,000 work hours.
Gross ammonia production for the first nine months of 2019 was approximately 7.6 million tons, and for the third quarter was more than 2.3 million tons. The company expects gross ammonia production during the fourth quarter to be higher than in the third quarter with less maintenance activity scheduled for the final three months of the year.
Sales Overview
Net sales in the first nine months of 2019 were $3.5 billion compared to $3.3 billion in 2018 due primarily to higher average selling prices across all major products. Net sales in the third quarter of 2019 were similar to the third quarter of 2018.
Total sales volumes for the first nine months of 2019 and third quarter of 2019 were similar to the prior year periods.
Average selling prices for the first nine months of 2019 were higher year-over-year across all major products due to a tighter global nitrogen supply and demand balance than the prior year period and logistical issues in North America that limited supply at some inland locations. Average selling prices for the third quarter of 2019 were similarly higher for urea, urea ammonium nitrate (UAN) and ammonium nitrate (AN), and were lower for ammonia due to greater global supply availability.
Cost of sales in the first nine months of 2019 and the third quarter of 2019 decreased primarily due to lower realized natural gas costs partially offset by higher freight and distribution costs.
In the first nine months of 2019, the average cost of natural gas reflected in the company’s cost of sales was $2.86 per MMBtu compared to the average cost of natural gas in cost of sales of $3.14 per MMBtu in the first nine months of 2018. In the third quarter of 2019, the average cost of natural gas reflected in the company’s cost of sales was $2.24 per MMBtu compared to the average cost of natural gas in cost of sales of $3.19 per MMBtu in the third quarter of 2018.
Market Overview
The company expects that nitrogen industry fundamentals will continue to improve in both the near- and longer-term as the global market continues to tighten over the coming years.