In This Article:
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Adjusted EBITDA: $38 million for Q4 2024, up from $25 million in Q4 2023.
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Impact of Turnaround: Estimated $7 million impact from the planned turnaround at Cherokee facilities.
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Estimated Adjusted EBITDA without Turnaround Impact: Approximately $45 million for Q4 2024.
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CapEx for 2024: $92 million, with $25 million for growth and the remainder for sustaining operations.
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Senior Secured Notes Repurchase: Approximately $222 million in principal amount repurchased over two years.
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Stock Repurchase: Approximately 4.6 million shares repurchased over two years.
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2025 CapEx Expectation: $80 million to $90 million, with $60 million to $65 million for EH&S and reliability, and $20 million to $25 million for growth investments.
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Natural Gas Cost: Average of $3.85 per MMBTU for the first two months of 2025.
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Effective Tax Rate for 2025: Approximately 25%, with no material cash taxes expected due to NOLs.
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Incremental Annual EBITDA from CCS Project: Expected $15 million to $20 million once completed.
Release Date: February 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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LSB Industries Inc (NYSE:LXU) reported a significant year-over-year increase in adjusted EBITDA, despite a planned turnaround at the Cherokee facility.
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The company achieved record-high daily production rates for urea and UAN, with the Cherokee site finishing 2024 with zero recordable injuries.
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LSB Industries Inc (NYSE:LXU) successfully increased production volumes to meet healthy demand from primary industrial end markets.
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The company completed two margin enhancement projects in 2024, expected to yield full-year incremental EBITDA benefits in 2025.
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LSB Industries Inc (NYSE:LXU) has a strong cash flow balance and a year-end leverage ratio below the target level for a mid-cycle pricing environment.
Negative Points
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The planned turnaround at the Cherokee facility had an estimated $7 million negative impact on the fourth quarter adjusted EBITDA.
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LSB Industries Inc (NYSE:LXU) faces potential impacts from tariffs on US nitrogen imports from Canada, which could affect pricing in ag and industrial markets.
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The company expects higher natural gas prices in 2025, which could impact production costs.
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Ammonia sales volumes are expected to decline in 2025 as more production is upgraded to higher margin downstream products.
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The timeline for the El Dorado CCS project is dependent on the EPA's approval of the Class 6 permit application, which remains uncertain.
Q & A Highlights
Q: Why is the $600 price point significant for low carbon ammonia customers? A: Mark Behrman, CEO, explained that while the $600 price point is not necessarily the right price for customers, it is a level derived from market conversations indicating that transactions would likely occur below this price. This price point is crucial for making the project economically viable and attractive to customers.