CF Industries Q1 Earnings Call Highlights

Key Points

• CF Industries reported Q1 2026 adjusted EBITDA of $983 million, with net earnings of about $615 million, as strong operations and a tight global nitrogen market supported results. The quarter also included a roughly $170 million gain from a litigation settlement.
• Executives said the global nitrogen market remains severely tight due to conflict-related disruptions, export restrictions, and supply outages in key producing regions. They expect India to drive major demand in 2026, while markets could stay tight through 2027 and beyond.
• CF highlighted its North American asset base as a key advantage and said the Blue Point ammonia project and other decarbonization initiatives should boost long-term returns and free cash flow. The company also has $1.7 billion remaining under its share repurchase authorization and expects to use it before expiration.

CF Industries NYSE: CF reported first-quarter 2026 adjusted EBITDA of $983 million, as executives said strong operations and a tightening global nitrogen market supported results heading into the North American spring application season.

President and CEO Chris Bohn said the company’s performance reflected “a continued focus on safety, operational excellence, and disciplined execution.” He said CF ran available ammonia capacity at nearly 100% during the quarter and ended the period with a trailing 12-month recordable incident rate of 0.16 incidents per 200,000 hours worked.

Rich Hoker, vice president, interim CFO and chief accounting officer, said CF reported net earnings attributable to common stockholders of approximately $615 million, or $3.98 per diluted share. EBITDA was approximately $1 billion. The results included a gain of approximately $170 million from a previously disclosed litigation settlement with Orica and Nelson Brothers, which was recorded in the first quarter, with proceeds received in April.

Global Nitrogen Market Remains Tight

Executives devoted much of the call to the global nitrogen supply-demand balance, which they said has been tight for more than a year and worsened late in the quarter due to the conflict with Iran and the closure of the Strait of Hormuz.

Bohn said the conflict “severely tightened the global nitrogen market,” adding that lost production cannot be recovered and that damaged nitrogen and upstream feedstock capacity will take time to restore. He also said the Russia-Ukraine war continues to disrupt nitrogen production at Russian facilities.

Bert Frost, executive vice president and chief commercial officer, said exports of urea and ammonia from the region have been “severely limited,” removing a meaningful portion of low-cost supply during peak nitrogen season. He added that some producers using imported liquefied natural gas for nitrogen production have curtailed or shut down facilities because of fuel availability issues.

Frost said several countries have restricted exports, further reducing available supply in global trade flows. He cited China’s continued focus on domestic agricultural supply, Russia’s export restrictions and Egypt’s move to apply a $90 per metric ton duty on nitrogen fertilizer exports.

CF expects India to be a major source of demand in 2026. Frost said India entered the year with low inventories and that urea import requirements could reach 10 million to 12 million metric tons, which would be approximately 10% to 30% higher than 2025 and nearly double 2024 imports.

Company Says North American Network Provides Advantage

Bohn said recent disruptions are driving a shift in how the nitrogen industry evaluates risk and returns. He argued that low natural gas costs alone are no longer sufficient to define advantaged production, saying geopolitical exposure, transport costs and operational reliability also matter.

He contrasted North America’s “low cost and low risk” nitrogen production base with what he described as fragile first-quartile capacity in regions exposed to geopolitical risk. Bohn said CF’s North American manufacturing and distribution network represents “premium-grade assets” and said the company believes a geopolitical risk premium will be an enduring structural headwind for more exposed producers.

In the question-and-answer session, Bohn said the disruption reinforces the company’s strategy of expanding in North America. He said the Blue Point project’s return profile has improved in light of the changing market environment.

Spring Supply and Pricing Discussed

Frost said CF has been moving product to customers for the spring 2026 planting season since July 2025 and that inventories for pre-plant and post-plant applications appear well covered. He said the company temporarily delayed a turnaround at Donaldsonville, allowing it to produce about 100,000 additional tons of urea for the season.

CF also repurposed Yazoo City rail assets to move urea from Donaldsonville into the Corn Belt and to ship ammonia from Medicine Hat, Canada, into the company’s U.S. distribution network.

During the Q&A, Frost said the U.S. is currently the lowest-priced nitrogen market in the world, citing recent pricing around $600 per short ton, compared with North African pricing above $800 per metric ton. He said North America appears well supplied for spring, but he expects the New Orleans market to move closer to global pricing over time.

Looking ahead, Frost said global nitrogen markets are expected to remain tight through 2026 and into 2027. He also said the company expects further structural tightening through the end of the decade, as new nitrogen capacity under construction falls short of the traditional nitrogen demand growth rate.

Capital Spending, Blue Point and Share Repurchases

Hoker said CF’s capital expenditure projection for 2026 remains approximately $1.3 billion on a consolidated basis. CF’s portion is expected to be approximately $950 million, including $550 million for sustaining capital expenditures and about $400 million related to the Blue Point joint venture and common infrastructure at the site.

Construction on the Blue Point ammonia plant is expected to begin this year once applicable permits are received, Hoker said. The project is expected to add more than 1.5 million tons of gross ammonia capacity in the United States when it begins operation late in 2029.

Hoker also said trailing 12-month net cash from operations was approximately $2.7 billion, while free cash flow was approximately $1.65 billion. CF repurchased approximately 150,000 shares for $15 million in the first quarter.

Bohn said CF has $1.7 billion remaining under its current share repurchase authorization and expects to execute the authorization before expiration. He said the company continues to view its shares as trading below intrinsic value.

Outlook Emphasizes Free Cash Flow and Decarbonization

Bohn said CF is positioned for the near, medium and long term because of its North American footprint, operational performance and free cash flow conversion. He also said the company is realizing decarbonization opportunities today that provide incremental free cash flow.

Frost said CF is seeing positive reception to low-carbon ammonia and upgraded products from Donaldsonville, as well as future production from Blue Point, which he said will be 95% or more decarbonized. Bohn also pointed to Section 45Q, shipments into Europe at a premium and recently announced work with Pepsi and other consumer packaged goods companies as examples of value from decarbonization efforts.

Bohn closed by saying the conflict with Iran represents the third major supply and demand shock to the global nitrogen market in the last six years and has exposed the fragile nature of the global nitrogen supply chain, including production, feedstock and logistics assets.

About CF Industries NYSE: CF

CF Industries Holdings, Inc is a leading global manufacturer of hydrogen and nitrogen products for agricultural and industrial customers. The company specializes in the production of ammonia, granular urea, urea ammonium nitrate (UAN), nitric acid and ammonium nitrate, which serve as key inputs for fertilizer blends, industrial chemicals and other downstream applications.

Headquartered in Deerfield, Illinois, CF Industries operates production facilities and distribution terminals across North America and the United Kingdom.

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