Rentech Nitrogen Partners LP (RNF)
Q1 2013 Earnings Call
May 09, 2013 04:30 pm ET
Julie Cafarella – VicePresident-Investor Relations & Communications
Hunt Ramsbottom – Chief Executive Officer
Dan Cohrs – Executive Vice President, Chief Financial Officer
Adam Samuelson – Goldman Sachs
Lucas Pipes – Brean Capital
Brent Rystrom – Feltl & Company
Jay Srivatsa – Chardan Capital Markets
Previous Statements by RNF
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And I’ll turn the call over to Julie Cafarella, Vice President of Investor Relations and Communications. Julie, you may begin.
Thank you. Welcome to Rentech Nitrogen’s conference call for the three months ended March 31, 2013. During this call, Hunt Ramsbottom, CEO of Rentech Nitrogen will summarize the Partnerships activities during the quarter and provide our financial outlook. Dan Cohrs, our Chief Financial Officer will give a financial review of the period. Also in the room with us today is Marc Wallis, SVP of Sales and Marketing, who will be available for the question-and-answer session at the end of our prepared remarks.
Please be advised that certain information discussed on this conference call will contain forward-looking statements. They can be identified by the use of terminology such as may, will, expect, believe and other comparable terms. You are cautioned that while forward-looking statements reflect our good faith belief and best judgment based upon current information, they are not guarantees of future performance and are subject to known and unknown risks and uncertainties and risk factors detailed from time to time in the company’s periodic reports and registration statements filed with the Securities and Exchange Commission.
The forward-looking statements in this call are made us of May 9, 2013 and Rentech Nitrogen does not undertake to revise or update these forward-looking statements except to the extent that it is required to do so under applicable law.
In addition, today’s presentation includes various non-GAAP financial measures. The disclosures related to such non-GAAP measures including reconciliations to the most directly comparable GAAP financial measures are included in our 2013 first quarter earnings press release that is available on our website.
Now, I’d like to turn the call over to Hunt Ramsbottom, CEO of Rentech Nitrogen.
Good afternoon, everyone and thank you for joining us today. The main drivers for the results for this period included the benefit of a full quarter’s contribution from the Pasadena Facility and a slow start for ammonia and ammonium sulfate deliveries due to bad weather. We maintained full production throughout the period of slow deliveries and we still expect a good year. We are reiterating 2013 guidance of $2.60 per unit for cash distributions.
During the quarter, we achieved 100% on-stream rates for the ammonia and UAN plants at East Dubuque facility. And during March, production exceeded main play capacity due to ideal temperatures for production.
Achieving such high production rates so long after the last turnaround is extraordinary and is a direct result of the integrity of our maintenance programs and capital improvements.
Production at the ammonium sulfate plant in the Pasadena Facility has more than doubled within 12 months. They are in the ramp-up period; the ammonium sulfate plant is operated below the target on-stream rate of 90%. The majority of the issues that are preventing targeted production are expected to be in resolved by de-bottlenecking project in November and the costs are within our guidance for maintenance CapEx.
As I mentioned we’re reiterating our guidance for cash distributions of $2.60 per unit in ‘13. Remember that the guidance includes the impact of two schedule outages at our facilities during 2013, and the impact of lost revenue due to the unscheduled outage at the East Dubuque facility in December 2012.
Excluding the effects of these outages, the forecast for 2013 cash available for distribution would be higher by approximately $0.65 per unit.
Please review the updated calculation of forecasted cash available for distribution included in our press release issued today. In April we raised new debt, which eliminated our amortization requirements and funded all of our announced projects. Dan will give you more detail on the stats later during the call.
Turning our attention to the first-quarter results we generated $0.38 in earnings per unit this quarter and declared a first quarter cash distribution of $0.50 per unit, which includes approximately $4 million of cash we collected on prepaid products that had not been delivered at the end of the quarter, but that has now been delivered. The distribution is payable on May15 to unit holders of record as of May 8.
First quarter results were dampened by persistent rain which delayed shipment of approximately 3,000 tons of prepaid ammonia volume in the quarter. UAN deliveries in the quarter were strong; much of the product shipped was for orders originally scheduled for delivery in the late 2012 that were delayed due to our plant outage in December.
On the ammonium sulfate front, we focused on the U.S. where we saw strong demand with prices north of $300 per ton. As we will discuss later weather affected movement of AS and we had vessel shipment schedule for the quarter that was delayed.
I will now turn it over to Dan to discuss the financials in more detail. Dan?