CF Industries Holdings (CF) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

August 3, 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 Half and Second Quarter of 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions].

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, Executive Vice President of Sales, Market Development and Supply Chain.

CF Industries reported its results for the first half and second 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'll find the 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 half of 2023, in which we generated adjusted EBITDA of over $1.7 billion. Our trailing 12-month net cash from operations was $3.2 billion and free cash flow was $2.1 billion. These results reflect outstanding execution by the CF Industries team against the backdrop of robust demand. Our plans ran extremely well and we leveraged our unique system flexibility to maximize results, given the high volume of just-in-time purchasing that took place.

We sold more product than we produced and ended the first half with low inventories. As you will hear from Bert in a moment, we believe we are really well positioned for the remainder of 2023 and into 2024.

While our safety performance remained good by most measures and comparisons, it is not where we expect it to be. Our 12-month rolling recordable injury rate at the end of June was 0.54 incidents per 200,000 labor hours. Ashraf and his team are focused on this, not to manage the number, but to ensure that all of our people go home in the same condition as when they came to work every day.