We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Non-Tech : UAN - The variable distribution MLP that could go a long way
UAN 116.97-3.9%Sep 30 4:00 PM EDT

 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
From: Elroy9/3/2021 1:00:28 PM
   of 653
My hunch is the Q3 distribution should be at least $4.00, and might be higher.

We get a $5m reversal of the charges taken for the previously planned Q4 2021 turnaround which has been postponed to 2022.

We get high sales prices for UAN and ammonia. It's hard to say what the prices will be since UAN forward sells production sometimes, but not others. My guess is they get AT LEAST $280/ton for UAN, compared to $237/ton in Q2 2021.

There was some production left over from Q2 which did not get sold. They will likely sell that in either Q3 or if not then for sure in Q4. Gotta wait and see.

And since there's no turnaround planned for 2021 now, we can expect the plants to run at maximum capacity. They've been doing fairly well with production recently hitting between 95%-100% of capacity. But you never know, we only find out about unplanned downtimes when the financial results are released.

Hurricane Ida is going to take competitors New Orleans plant off line for some period, hard to say how long, but whatever the length of downtime it's good for reduced supply. UAN has no such issue (I think) as their plants are not in the path of the storm.

The expected major cash user this quarter is the planned debt buyback of the $95m 9.25% stub that was left in existence when the refinancing was done. They've indicated they will buy it all back over two years, or when the carbon credits get monetized whichever comes first. Debt buyback reduces distribution in the quarter that they buy it. So perhaps they bought back $12m of debt in Q3, perhaps they bought have all $95m, perhaps they bought back zero, who knows?
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext