CF Industries, the US fertiliser manufacturer that owns the UK’s two ammonium nitrate plants, has reported a Q1 loss, despite recording the highest sales volume for any quarter in its history at 4.75 million tonnes, and also the largest production volume.
The Illinois-headquartered company made an operating income of $57m on revenues of $1.04 billion in the first three months of 2017, compared to $97m and $1.01bn in Q1 2016. After depreciation and amortisation charges, there was a net loss of $22m for the quarter, after a positive $97m a year earlier.
Ammonium nitrate sales from the two UK plants and one US facility were flat at $125m year-on -year, despite an increase in output to 568,000 tonnes (558,000 tonnes in Q1 2016, as the average price dropped to $220/tonne from $224/tonne a year earlier.
The global nitrogen oversupply and higher fuel prices in China are suppressing urea production there, with a consequent reduction in its urea exports, notes CF. It predicts that China’s urea exports in 2017 will total 5-6 million tonnes, down by 44% on 2016 and 64% on 2015.
“Outstanding execution by our team across the CF system delivered company record sales and production volumes in the first quarter, and we increased cash on our balance sheet as a result,” comments CF Industries’ president and chief executive Tony Will. “This high level of performance, paired with our enduring structural and operational advantages, positions us well for the rest of 2017 and the industry recovery we expect to begin in 2018.”