CVR Partners (NYSE:UAN) reported a third-quarter net loss as a planned turnaround at its East Dubuque facility reduced production and added expenses, though management said fertilizer demand and pricing improved following the summer reset.
The nitrogen fertilizer producer posted third-quarter net sales of $146 million, a net loss of $11 million, or $1.02 per common unit, and EBITDA of $20 million. The company recorded an operating loss of $4 million.
The board of directors of CVR Partners’ general partner declared a distribution of $1.79 per common unit. The distribution is scheduled to be paid Nov. 23 to unitholders of record at the close of the market on Nov. 16.
Turnaround Affects Production, Expenses
CEO Dane Neumann said ammonia plant utilization was 80% during the quarter, reflecting the planned turnaround at the East Dubuque site. The work began in late August, a few weeks later than originally planned because of equipment delays, and was completed in October under the revised schedule.
“Apart from the turnaround, our facilities ran well during the quarter,” Neumann said, adding that the company saw steady demand across its system after the summer price reset.
Interim CFO Richard Roberts said the year-over-year decline in EBITDA primarily reflected turnaround expenses, lower UAN selling prices and a modest decline in sales volumes. Direct operating expenses totaled $90 million, including approximately $27 million of turnaround expenses.
Excluding inventory and turnaround impacts, direct operating expenses rose about $1 million from the third quarter of 2025, primarily because of higher labor costs. That increase was partly offset by lower electricity and natural-gas consumption, Roberts said.
Total ammonia production was 175,000 gross tons, with 46,000 net tons available for sale. UAN production totaled 294,000 tons. The company sold approximately 327,000 tons of UAN at an average price of $309 per ton and about 36,000 tons of ammonia at an average price of $637 per ton.
- UAN prices declined approximately 11% from the prior-year quarter.
- Ammonia prices increased approximately 20% year over year.
- Total sales volumes declined slightly, primarily because the East Dubuque turnaround reduced production.
Market Conditions Improve Into 2027
Neumann said ammonia and UAN prices have increased steadily since summer, and the company has built a favorable order book for the balance of 2026 and into 2027.
Fall ammonia application is beginning in the Corn Belt as harvest advances, while activity in the Southern Plains is expected to increase in the coming weeks. Neumann said strong ammonia demand and limited terminal availability in the Corn Belt have pushed fall prices to their highest levels of the season.
For UAN, local supply remains tight and the first spring 2027 prices were posted in early October. CVR Partners has continued building its fourth-quarter and first-quarter 2027 business at what Neumann characterized as attractive pricing.
Management also cited global supply uncertainty tied to conflicts involving Russia, Ukraine and the Middle East, including risks to shipping through the Strait of Hormuz. Chinese exports have been elevated and Middle East volumes are recovering gradually, Neumann said, but attacks on shipping continue to present risks for fertilizer availability and prices.
European natural-gas prices have risen above $30 per MMBTU, contributing to production curtailments because European ammonia production costs remain above current import prices, according to Neumann. U.S. natural-gas prices remain near $3 per MMBTU, which management said supports domestic producers with access to low-cost feedstock.
Capital Projects and Outlook
During the East Dubuque turnaround, CVR Partners completed a brownfield capacity expansion and a water-quality upgrade project. The company plans to test its ability to operate sustainably at the expanded capacity during the fourth quarter.
At Coffeyville, the company plans a similar water-system upgrade, as well as expanded diesel exhaust fluid production and load-out capacity. Management said these initiatives are intended to improve reliability and production rates and support utilization above 95% of nameplate capacity, excluding turnaround effects.
CVR Partners is also completing detailed engineering and cost estimates for a Coffeyville feedstock-optionalities project. Subject to board approval, management expects construction to begin in 2027. Neumann said the project would give Coffeyville the ability to select an optimal mix of natural gas and third-party petroleum coke based on prevailing prices.
Third-quarter capital spending was $35 million, including $21 million of maintenance capital. The company expects 2026 capital spending of $95 million to $104 million, including $55 million to $63 million for maintenance. Management expects a significant portion of growth and profit-related spending to be funded from cash reserves accumulated in prior years.
At quarter-end, CVR Partners had total liquidity of $203 million, including $158 million in cash and $45 million available under its asset-based lending facility. The cash balance included approximately $43 million of customer prepayments for future product deliveries.
For the fourth quarter, the company expects ammonia utilization of 88% to 93%, direct operating expenses excluding inventory and turnaround effects of $58 million to $63 million, turnaround expenses of $4 million to $6 million, and capital spending of $26 million to $34 million.
About CVR Partners (NYSE:UAN)
CVR Partners, LP (NYSE: UAN) is a nitrogen fertilizer producer organized as a master limited partnership and managed by CVR GP, LLC. The company manufactures and sells nitrogen-based fertilizers used primarily in agricultural applications.
Its principal products are ammonia and urea ammonium nitrate (UAN) solution. Ammonia is sold directly to agricultural customers and other users, while UAN is a liquid fertilizer commonly applied to crops. CVR Partners markets its products to distributors, retailers, and agricultural customers.
CVR Partners operates production facilities in Coffeyville, Kansas, and East Dubuque, Illinois.
