CF Industries' Profit Surge: Ammonia Sales Drive Growth

CF Industries Holdings, Inc. (NYSE: CF), a leading global manufacturer of hydrogen and nitrogen products, reported a significant rise in fourth-quarter profit, driven by higher ammonia sales. The company's strong operational performance and strategic initiatives have positioned it well to continue creating substantial value for long-term shareholders.



In the fourth quarter of 2024, CF Industries reported net earnings attributable to common stockholders of $328 million, or $1.89 per diluted share, EBITDA of $582 million, and adjusted EBITDA of $562 million. These results compare to the fourth quarter of 2023, when the company reported net earnings of $274 million, or $1.44 per diluted share, EBITDA of $556 million, and adjusted EBITDA of $592 million. This 19.7% increase in net earnings can be attributed to the company's strategic focus on cost-advantaged North American-based production networks, operational capabilities, and disciplined strategic initiatives.

One of the key factors driving CF Industries' profit growth is the increase in ammonia sales. Gross ammonia production for the full year and fourth quarter of 2024 was approximately 9.8 million and 2.6 million tons, respectively, compared to 9.5 million and 2.5 million tons for the full year and fourth quarter of 2023. The Company expects gross ammonia production in 2025 to be approximately 10 million tons. This increase in ammonia sales volumes, driven by the addition of contractual commitments served from the recently acquired Waggaman ammonia production facility, offset lower sales volumes of urea ammonium nitrate solution (UAN), ammonium nitrate (AN), and other products.

CF Industries' strong operational performance, as evidenced by its 12-month rolling average recordable incident rate of 0.31 incidents per 200,000 work hours, has also contributed to the company's profitability. The company's cost-advantaged North American-based production network, operational capabilities, and disciplined strategic initiatives have enabled it to maintain a competitive edge in the market, even in the face of lower global energy costs that reduced the global market clearing price required to meet global demand.

The company's ability to generate substantial cash flow has also been a significant factor in its success. In the full year 2024, CF Industries generated net cash from operating activities of $2.27 billion and free cash flow of $1.45 billion. This strong cash generation allows the company to invest in strategic initiatives, such as the acquisition of the Waggaman ammonia production facility, and return capital to shareholders through share repurchases and dividends.

CF Industries' commitment to returning capital to shareholders is evident in its share repurchase program. In 2024, the company repurchased 18.8 million shares for $1.51 billion, which included the repurchase of 4.4 million shares for $385 million during the fourth quarter of 2024. Since the company commenced its current $3 billion share repurchase program in the second quarter of 2023, it has repurchased 24.4 million shares for approximately $1.94 billion.

CF Industries' strategic focus on cost-advantaged North American-based production networks positions the company favorably in the global nitrogen industry. The company's strong financial performance, consistent cash generation, and commitment to returning capital to shareholders are all indicative of the long-term potential for the company in the global nitrogen industry. As the company continues to execute on its strategic initiatives and adapt to changes in the global energy market, it is well-positioned to create substantial value for long-term shareholders.