CF Industries Reports Significant Q3 Profit Increase

(Reuters) – Fertilizer maker CF Industries (NYSE:CF) on Wednesday reported a 68% rise in third-quarter profit, aided by strong prices for nitrogen fertilizers.

Strong Price Increase

Benchmark ammonia prices reached about $530 per ton in September, rising from $410 per ton at the end of June, due to production shut-ins in Trinidad and Egypt.

Natural Gas Prices

Prices of natural gas, a key feedstock for nitrogen fertilizers, remained subdued during much of the quarter, benefiting CF Industries' margins. The average cost of natural gas was $2.10 per million British thermal unit (mmbtu), compared to $2.54 per mmbtu last year.

Production Growth

Ammonia production volumes rose 8.7% during the third quarter, helped by the acquisition of the Waggaman facility in Louisiana. CF Industries, which makes ammonia and urea, posted an adjusted third-quarter core profit of $511 million, exceeding Wall Street estimates of $509 million.

Global Production Challenges

The company noted that global production is expected to remain constrained due to ongoing challenges related to the cost and availability of natural gas.

Export Trends

Urea exports from Russia have increased by 5% in 2024, supported by rising production capacity and the willingness of countries like the United States and Brazil to purchase Russian fertilizers. The United States does not impose direct sanctions on Russian fertilizer, crucial for global food supplies.

Meanwhile, exports from China, a major fertilizer producer, have declined by 91% compared to last year due to export curbs.

Earnings Overview

The Northbrook, Illinois-based company reported net earnings of $276 million, or $1.55 per share, for the three months ended September 30, compared to $164 million, or $0.85 per share, last year.