CF Industries (NYSE:CF) reported first-half 2026 adjusted EBITDA of $2.2 billion and second-quarter adjusted EBITDA of $1.2 billion, as tight global nitrogen supply-demand conditions and strong operating performance supported results.
Net earnings attributable to common stockholders totaled $1.3 billion, or $8.71 per diluted share, for the first half, including $727 million, or $4.73 per diluted share, in the second quarter, Chief Financial Officer Andrew Scribner said during the company’s earnings call.
Supply Constraints Support Nitrogen Market
Chief Commercial Officer Bert Frost said global nitrogen prices rose during the first half as an already-tight market was further constrained by supply disruptions associated with the conflict with Iran. While some customers in regions with later application seasons deferred purchases amid higher prices, North American agricultural demand remained strong through most of the period, particularly for ammonia and urea.
CF Industries shifted production toward urea from UAN during the first half, Frost said, while also delivering its second-highest first-half diesel exhaust fluid, or DEF, volumes. DEF was the company’s highest-margin product during the period.
Purchasing slowed in North America during June as the nitrogen distribution channel reduced inventories to low levels. However, Frost said those inventory positions supported strong participation in the company’s UAN and ammonia fill programs in July. CF Industries built a UAN order book extending into November and expects a strong fall ammonia season, he said.
The company expects the global nitrogen market to remain tight into 2027. Frost cited higher capital costs, permanent capacity closures, limited new capacity additions, geopolitical uncertainty, elevated logistics and insurance costs, and high liquefied natural gas prices affecting marginal producers.
China is expected to export urea volumes similar to last year, according to Frost. While those exports are needed to meet global demand, he said they are not expected to materially loosen market conditions. CF Industries also expects purchasing activity to recover in deferred markets, including Brazil and India, while North American demand remains firm through upcoming application seasons.
Higher Construction Costs Raise Mid-Cycle Outlook
Management raised its baseline mid-cycle outlook, projecting approximately $2.9 billion in EBITDA and $1.7 billion in free cash flow. Scribner said the revised outlook reflects higher construction costs for new nitrogen capacity in regions with low-cost natural gas, which have narrowed the historic cost advantage those locations held over North American projects.
During the question-and-answer session, Bohn said the company’s assumed NOLA urea price increased to $385 per short ton from $355 per short ton. Of the $30 increase, he estimated that roughly $10 could be linked to structural changes associated with geopolitical disruptions, including higher freight, insurance and risk-related costs. The remainder principally reflects higher capital costs, he said.
Scribner said the company’s analysis assumes a 1.3 million- to 1.4 million-ton capacity site with capital spending of approximately $2.6 billion to $2.8 billion, natural gas costs of $3.50, and a 10% to 12% financial return.
By 2030, CF Industries expects initiatives already underway to lift mid-cycle EBITDA to approximately $3.3 billion. Scribner said that expected $400 million increase includes about $300 million from the Blue Point project and $100 million from additional carbon-capture benefits at Donaldsonville and Yazoo City.
Blue Point and Yazoo City Projects Advance
Bohn said Blue Point has received all necessary construction permits, nearly all long-lead equipment has been ordered, and module fabrication is expected to begin later this year. Construction is expected to begin in August, accelerating the company’s capital-expenditure pace.
CF Industries expects 2026 capital expenditures of approximately $1.3 billion, with the company’s share totaling about $950 million. Bohn said roughly 50% of Blue Point capital expenditures are fixed through engineering, module-yard work and certain lump-sum turnkey infrastructure contracts.
At Yazoo City, the company now expects operations to resume during the first half of 2027, rather than late 2026. Bohn said the revised schedule primarily reflects longer procurement timelines for electrical equipment.
The site will no longer produce prilled ammonium nitrate. Instead, it will produce ammonia, ammonium nitrate solution and DEF, changes management said are intended to improve the complex’s operational and logistics flexibility. Scribner said CF Industries has recorded nearly $50 million in equipment impairments connected with Yazoo City and has received about $75 million in insurance recoveries to date, including property damage and business interruption proceeds.
Cash Flow, Dividend and Share Repurchases
Trailing 12-month net cash from operations was approximately $3 billion and free cash flow was approximately $1.8 billion, Scribner said. Over that period, CF Industries returned nearly $1.3 billion to shareholders, including $958 million used to repurchase 10.6 million shares and $314 million in dividend payments.
In July, the board increased the quarterly dividend 20% to $0.60 per share. Since the start of 2021, shares outstanding have declined 29%, while the company’s dividend has doubled, Scribner said.
Bohn said CF Industries remains committed to share repurchases and views its shares as undervalued. Management said its capital-allocation priorities remain strategic growth investments, share repurchases and dividends.
The company also said its low-carbon ammonia sales program continued to gain momentum. About 10% of ammonia sales volume in the first half was low carbon and earned an average premium of more than $20 per ton, according to Frost.
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.
