CVR Partners (UAN) Q2 FY26 earnings call: guidance and Q&A

Is CVR Partners still interested in acquisitions given recent management changes, and what are the strategic criteria?

Management stated that "anything's on the table" including acquisition, merger, participating in a build, or even a sale if attractive. Acquisitions would need to be accretive to cash flow very quickly. They see challenges in the current environment for acquisitions and sales, but would consider participating as an operator/marketer in a build project rather than a financial backer.

“I would say our thought process is really anything's on the table, acquisition, merger, participating in a bill, even a sale if there were an attractive offer.”

asked by Rob McGuire · answered by Unknown Speaker

How much of Q3/H2 2026 ammonia and UAN production was pre-sold during the summer fill programs, and how does this compare to historical averages?

Management declined to give specific details on the book's position but noted that demand slowed in June when UAN prices were high. However, buyers returned for the fill programs, which saw a normal seasonal reset. Sales were roughly in line with expectations, with more fall prepay for ammonia occurring earlier than last year.

“Yes, won't give any specific details on the position of the book, but as we said in the prepared remarks, we did see demand slow down a little bit in June when the UAN nitrogen value started trading at a really wide premium. However, when we got Bill, buyers came right back to the market.”

asked by Rob McGuire · answered by Unknown Speaker

Can management provide color on UAN and ammonia inventory levels at the distributor, retailer, or farmer level?

Management indicated that inventories downstream were higher earlier in the year. However, the strong demand during the fill programs and a recent uptick in buying suggest that product is now moving through the channels to retailers and farmers, implying availability concerns are currently driving purchasing behavior over price risk.

“What we did feel was that inventories did get a little bit higher downstream of us earlier in the year. That said with the strength of the fill, clearly there was a need for product and we've seen a recent uptick in buying, which does imply a private product is now moving downstream to retailers and farmers.”

asked by Rob McGuire · answered by Unknown Speaker

What is the expected duration, required downtime, and updated cost estimate for the Coffeyville alternative feedstock project?

Mike Wright stated the project is expected to complete in the second half of 2027, with no anticipated downtime that would impact production. The cost estimate is now less than half of the original, as the scope was optimized, and it will remain within the reserves already allocated for the project.

“Kind of the project really right now as it stands with the delivery of equipment, construction and the permitting, the project will complete likely in the second half of 27. The good news is there is no expected downtime associated with that project.”

asked by Rob McGuire · answered by Mike Wright

Given examples like Air Products and Yara backing away from projects, what would need to change for the industry to confidently build new plants and achieve necessary returns?

Management acknowledged the massive expense and execution risk of new builds, coupled with murky long-term pricing visibility. They suggested that government backing, long-term customer commitments, or equity participation could help de-risk projects for producers, as it's challenging for one party to absorb all the risk.

“I think we've seen things come out about government backing for ammonia expansion, or if there were opportunities for long-term customer commitments or equity participation that helps de-risk for the producer.”

asked by Rob McGuire · answered by Unknown Speaker