CF Industries (CF) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

May 2, 2023 11:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to CF Industries' First Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] We will facilitate the question and answer session toward the end of the presentation. [Operator Instruction]

I would now like to turn the presentation over to the host for today, Mr. Martin Jarosick with CF Investor Relations.

Sir, please proceed.

Martin Jarosick

Good morning, and thanks for joining the CF Industries earnings conference call. With me today are Tony Will, CEO; Chris Bohn, CFO; and Bert Frost, Senior Vice President of Sales, Market Development and Supply Chain.

CF Industries reported its results for the first quarter of 2023 yesterday afternoon. On this call, we'll review the results, discuss our outlook and then host a question-and-answer session. Statements made on this call and in the presentation on our website that are not historical facts are forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in any statements. More detailed information about factors that may affect our performance may be found in our filings with the SEC, which are available on our website.

Also, you will find reconciliations between GAAP and non-GAAP measures in the press release and presentation posted on our website.

Now let me introduce Tony Will, our President and CEO.

Tony Will

Thanks, Martin, and good morning, everyone. Yesterday afternoon, we posted results for the first quarter of 2023, in which we generated adjusted EBITDA of $866 million. Our cash generation remains strong. And on a trailing 12-month basis, our free cash flow was $2.3 billion.

These results reflect continued outstanding execution by the CF Industries team. We ran our plants well, leveraged our logistics and distribution capabilities and most importantly, work safely. At the end of the quarter, our 12-month reportable incident rate was 0.33 incidents per 200,000 labor hours, significantly better than industry averages.

While last year's unprecedented pricing environment has moderated, global industry dynamics remain favorable. Global nitrogen demand that was priced out of the market last year is returning driven by the need to replenish grain stocks. At the same time, forward price curves suggest that energy spreads between North America and high-cost producers in Europe and Asia will continue to be significantly wider than historical averages.