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    CF
    Earnings call· Jun 2026(Q2 FY26)

    CF Industries Holdings Q2 FY26 earnings call CF

    Aug 6, 2026 Source

    Executive summary

    CF Industries Q2 FY26 — Strong Operational Performance and Elevated Mid-Cycle Earnings

    CF Industries delivered strong operational results in Q2 FY26, driven by high asset utilization and a tight global nitrogen market exacerbated by geopolitical events. The company raised its mid-cycle earnings expectations, citing structural shifts in capital costs and reinforcing the value of its North American asset base. Management emphasized disciplined capital allocation, including a dividend increase and continued share repurchases, while progressing strategic growth initiatives like Blue Point and evaluating further high-return projects.

    Highlights

    5

    • Adjusted EBITDA of $2.2 billion for H1 2026, reflecting strong operational performance and tight global nitrogen supply-demand balance.

    • Achieved a trailing 12-month incident rate of 0.16 incidents per 200,000 hours worked, well below industry averages.

    • Operated available ammonia capacity at nearly 98% in H1 2026, meeting North American demand.

    • Raised mid-cycle EBITDA expectations to $2.9 billion and free cash flow to $1.7 billion, with a target of $3.3 billion by 2030.

    • Increased quarterly dividend by 20% to $0.60 per share and repurchased 10.6 million shares for $958 million in the last 12 months.

    Concerns

    3

    • Yazoo City complex to resume operations in H1 2027, pushed back from late 2026 due to extended procurement timelines for electrical gear.

    • Global nitrogen market views EBITDA and free cash flow growth primarily through the lens of short-term geopolitical friction, missing structural shifts.

    • Fixed costs were up about $75 million in Q2, driven by $10 million in distribution/logistics and $60 million split between higher purchased ammonia costs and fixed cost absorption due to Yazoo City being down.

    Guidance & targets

    6
    CategoryTargetConfidence
    Full-year Capital Expenditures
    $1.3 billion
    medium materiality
    High
    Mid-cycle Adjusted EBITDA
    $2.9 billion
    high materiality
    High
    Mid-cycle Free Cash Flow
    $1.7 billion
    high materiality
    High
    Mid-cycle Adjusted EBITDA (with strategic initiatives)
    $3.3 billion
    high materiality
    High
    Global Nitrogen Market Tightness
    Remain tight
    high materiality
    High
    Global Nitrogen Market Structural Tightening
    Continued structural tightening
    high materiality
    High

    Operational metrics

    27
    Adjusted EBITDA
    $2.2 billion
    H1 2026

    Generated adjusted EBITDA of $2.2 billion for the first half of 2026.

    Adjusted EBITDA
    $1.2 billion
    Q2 2026

    EBITDA and adjusted EBITDA were about $1.2 billion for the second quarter of 2026.

    Capital returned to shareholders
    $1.3 billion
    TTM

    Returned nearly $1.3 billion of free cash flow to shareholders over the last 12 months.

    Share repurchases
    $958 million
    TTM

    Repurchasing 10.6 million shares for $958 million.

    Dividend payments
    $314 million
    TTM

    Paid $314 million in dividend payments.

    Quarterly dividend per share
    $0.60up 20% vs prior
    Quarterly

    Board increased quarterly dividend by 20% to $0.60 per share.

    Shares outstanding decrease
    29%
    Since 2021

    Shares outstanding have decreased 29% since the start of 2021.

    Dividend increase
    Doubled
    Since 2021

    Over that time, our dividend has doubled.

    Capital expenditures (CF Industries portion)
    $950 million
    FY26

    CF Industries' portion of projected $1.3 billion capital expenditures in 2026.

    Trailing 12-month incident rate (TRIFR)
    0.16well below industry averages
    TTM

    Closed the quarter with trailing 12-month incident rate of 0.16 incidents per 200,000 hours work.

    Ammonia capacity utilization
    98%
    H1 2026

    Operated our available ammonia capacity at nearly 98%.

    Low carbon ammonia sales volume
    10%
    H1 2026

    Approximately 10% of our ammonia sales volumes in the first half were low carbon that earned an average premium of more than $20 per ton.

    DEF market size
    2.2 millionfrom basically zero 15 years ago
    Today

    DEF has grown to about 2.2 million tons of urea equivalent in North America.

    DEF market size projection
    3 million
    Early next decade

    We see this market by the early part of next decade, 2030, 2031, hitting 3 million tons or over.

    45Q income
    $45 million
    H1 2026

    The revenue through the first half of the year is about $45 million associated with the 45Q.

    Fixed costs increase
    $75 million
    Q2 2026

    If you strip out the impact of volume in gas, our fixed costs were up about $75 million.

    Global urea price range
    $600 to $700come off the highs of Q2
    Today

    The market has come off the highs of Q2 and is today balanced in the $600 to $700 range, depending on destinations.

    Global urea price level
    $400-$415corrected back up
    Today

    We've since corrected back up to the $400, $415 level where we are today.

    China operating rate
    82-83%CF runs at 98-99%
    Today

    Today, they're running at about -- we target them at an 82% to 83% operating rate where we run at 98% to 99%.

    China internal urea consumption
    60-64 million
    Annual

    The growth in demand over the years were there over 60 million, 63, 64 million tons of consumption internally.

    India import demand (expected)
    9-10 millionover last year
    Annual

    We anticipate India to be an import demand of 9 million to 10 million tons, which is over what they were last year.

    India tendered urea
    4.27 million
    YTD

    They had the tender for 2.5 and a tender for 1.770, so total to date is 4.27 tons.

    India domestic production loss
    1.5-2 million
    Annual

    We estimate they lost 1.5 million to 2 million tons of domestic production.

    New clean energy plants in construction
    4out of 107 million announced
    Today

    There was like 107 green and blue plants announced, of which I think there's 4 in construction today, of which ours is 1 of them.

    Share repurchase program progress
    $500 millioninto a $2 billion program
    Current

    We're $500 million into a $2 billion program.

    Dividend yield
    2.1%vs 1.8% prior, S&P 1.1%
    Current

    The increase that we did, look at it from a 1.8% yield to 2.1% compared to the S&P of 1.1%.

    Natural gas price assumption for new capacity
    $350
    Mid-cycle

    If we assume $350 natural gas and 10% to 12% financial return, that's how you get to the $385 price.

    Orderbook & backlog

    1
    UAN order bookSubstantialJuly 2026

    Extends into November, average price close to $300.

    Product announcements

    1
    ProductTypeDetails
    DEF unit at Courtrightroadmap

    Deals & partnerships

    1
    JERA and MitsuiOfftake agreement for low carbon ammonia

    Partners for the Blue Point project, receiving 1 million tons of low carbon ammonia.

    Capital programs

    2
    Blue Point constructionunderway
    Spent to date: $500 million
    Funding: Partnerships with Linde, Oxy (CCS unit), Mitsui, JERA
    Start: August 2026

    Benefit: 1 million tons of incremental demand (low carbon ammonia)

    Received all necessary permits to begin construction. Nearly all long lead items are ordered and module fabrication is set to begin later this year. 1 million tons of low carbon ammonia will go to JERA and Mitsui.

    Yazoo City complex repairsunderway
    Funding: Insurance recovery
    Start: Q4 2025

    Benefit: Improved site's long-term sustainability and operational flexibility, broader customer base.

    Expected to resume operations in the first half of 2027 after completing work to improve the site's long-term sustainability and operational flexibility. Will no longer be pulling ammonium nitrate; will do ammonium nitrate solution, ammonia, and DEF. Insurance recovery of $75 million to date, expected to offset capital build cost.

    Risks & headwinds

    4
    Geopolitical conflict (with Iran)Current

    Further strained global nitrogen supply demand balance. Freight from Middle East to Gulf now $70 (vs $35 a year ago). $5 to $10 in insurance costs.

    Mitigation: Low-cost, low-risk North American asset base and high utilization rates.

    High LNG pricesOngoing

    Pressure production economics for marginal nitrogen producers and are likely to limit operating rates. EU gas structure is at a disadvantage with $18 to $20 gas.

    Mitigation: CF's low-cost North American natural gas position.

    Deferred customer purchasesQ2 2026

    Customers' slowed purchases of the nitrogen channel drew inventories down to a very low level in June. Soft demand here in the second quarter.

    Mitigation: Strong participation in UAN and ammonia fill programs in July, building a substantial UAN order book.

    Valuation disconnectOngoing

    Shares are still incredibly undervalued. Trading between $100 and $140 in the last 6 weeks.

    Mitigation: Continuing to perform at the highest level, aggressive share repurchases, focus on strategic growth and operational excellence.

    What to watch in Q3 FY26

    5

    Yazoo City operations restart

    H1 2027
    CurrentOperations suspended
    TargetOn track for H1 2027 restart

    Why it matters

    Successful restart of Yazoo City is critical for restoring full production capacity and realizing enhanced operational flexibility and sustainability.

    Within our existing network, we expect our Yazoo City complex to resume operations in the first half of 2027 after completing work to improve the site's long-term sustainability and operational flexibility.

    Q&A highlights

    5

    How much of the $410/short ton mid-cycle price change is due to capital cost inflation vs. geopolitical structural changes?

    Chris Bohn explained that of the $30 increase (from $355 to $385 NOLA urea/short ton), about $10 is due to structural geopolitical changes (e.g., freight, insurance) and the rest is due to higher capital costs and the closing gap between US and global construction costs. Andrew Scribner added that the $385 price assumes 1.3M-1.4M ton capacity sites with $2.6B-$2.8B CapEx, $350 natural gas, and 10-12% financial return.

    “Of that $30, there's probably $10 that may be associated with structural changes that don't go away as a result of these geopolitical events. And then the remaining amount probably exists due to higher capital costs and really a closing of that gap between U.S. construction and outside of the U.S.”

    asked by Ben Isaacson · answered by Christopher Bohn

    2 min read6 chapters

    Detailed Narrative

    01

    Operational Excellence and Safety

    CF Industries demonstrated strong operational performance in the first half of 2026, achieving nearly 98% utilization of available ammonia capacity. This was supported by an outstanding safety record, with a trailing 12-month incident rate of 0.16, significantly below industry averages. The company's focus on operational efficiency allowed it to meet robust North American agricultural demand.

    02

    Strategic Initiatives Progress

    The Blue Point project is advancing, with all necessary permits secured for construction, long-lead items ordered, and module fabrication commencing later this year. The Yazoo City complex is undergoing work to enhance long-term sustainability and operational flexibility, with operations expected to resume in the first half of 2027.

    03

    Elevated Mid-Cycle Earnings Power

    Management highlighted a structural shift in the industry, where higher global capital costs have increased the incentive price for new nitrogen capacity. This has structurally raised CF Industries' baseline mid-cycle EBITDA expectations to $2.9 billion and free cash flow to $1.7 billion, with further upside to $3.3 billion by 2030 from decarbonization projects.

    04

    Global Nitrogen Market Dynamics

    The global nitrogen market remains tight, exacerbated by supply disruptions from the conflict with Iran and high LNG prices pressuring marginal producers. Despite some deferred purchases in Q2, strong participation in UAN and ammonia fill programs in July indicates robust demand. The company expects the market to remain tight into 2027 and structurally tighten through the end of the decade.

    05

    Capital Allocation and Shareholder Returns

    CF Industries continues its disciplined capital allocation strategy, returning nearly $1.3 billion to shareholders in the last 12 months through $958 million in share repurchases and $314 million in dividends. The quarterly dividend was increased by 20% to $0.60 per share, and shares outstanding have decreased by 29% since 2021.

    06

    DEF Market Growth

    The company is exploring further growth opportunities in the Diesel Exhaust Fluid (DEF) market, initiating a FEED study for a new DEF unit at its Courtright facility. The DEF market, currently at 2.2 million urea equivalent tons, is projected to reach over 3 million tons by early next decade, driven by increasing demand from new power units and higher dosing rates.

    AI-generated summary of the company’s earnings call. Not investment advice.