LSB Industries Inc (LXU) 2024 Q2 法說會逐字稿

Greetings, and welcome to the LSB Industries second-quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎參加 LSB Industries 2024 年第二季財報電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。

It is now my pleasure to introduce your host, Fred Buonocore, Vice President of Investor Relations. Thank you, sir. You may begin.

現在我很高興向您介紹主持人，投資者關係副總裁 Fred Buonocore。謝謝您，先生。你可以開始了。

Good morning, everyone. Joining me today are Mark Behrman, our Chief Executive Officer; Cheryl Maguire, our Chief Financial Officer; and Damien Renwick, our Chief Commercial Officer.

大家早安。今天加入我的是我們的執行長 Mark Behrman；謝麗爾·馬奎爾，我們的財務長；以及我們的首席商務長 Damien Renwick。

Please note that today's call includes forward-looking statements. These statements are based on the company's current intent, expectations and projections. They are not guarantees of future performance, and a variety of factors could cause the actual results to differ materially.

請注意，今天的電話會議包含前瞻性陳述。這些陳述是基於公司目前的意圖、期望和預測。它們並不是對未來業績的保證，多種因素可能導致實際結果有重大差異。

On the call, we will reference non-GAAP results. Please see the press release in the Investors section of our website, lsbindustries.com, for further information regarding forward-looking statements and reconciliations of non-GAAP results to GAAP results.

在電話會議上，我們將參考非 GAAP 業績。請參閱我們網站 lsbindustries.com 投資者部分的新聞稿，以了解有關前瞻性陳述以及非 GAAP 業績與 GAAP 業績調節的更多資訊。

As a reminder, we have a stockholder rights plan to protect certain tax attributes. Please see the Investors section of our website at lsbindustries.com for further important details.

提醒一下，我們有一個股東權利計畫來保護某些稅收屬性。請參閱我們網站 lsbindustries.com 的投資者部分，以了解更多重要詳情。

At this time, I'd like to go ahead and turn the call over to Mark.

這時，我想把電話轉給馬克。

Thank you, Fred. Turning to page 4 of our presentation, we took a major step forward with our low-carbon product strategy in the second quarter. In May, we entered into a multiyear agreement with Freeport Minerals to supply low-carbon ammonium nitrate solution or ANS for use in Freeport's copper mining operations.

謝謝你，弗雷德。翻到我們簡報的第 4 頁，我們在第二季的低碳產品策略方面向前邁出了一大步。5 月，我們與 Freeport Minerals 簽訂了多年協議，為 Freeport 的銅礦開採業務提供低碳硝酸銨溶液或 ANS。

We believe that this agreement is a first of its kind in our industry. And we view it as a validation of our assertion that our industrial customers will value the low-carbon ammonia and derivative products we plan to produce in the coming years as a means of reducing their own CO2 emissions.

我們相信，該協議在我們行業尚屬首次。我們認為這證實了我們的主張，即我們的工業客戶將重視我們計劃在未來幾年生產的低碳氨和衍生產品，作為減少他們自身二氧化碳排放的一種手段。

With respect to our second-quarter operating results, I'm very pleased to say that we had no recordable incidents during the quarter, thanks to the strong safety focus of the teams at our facilities. In terms of financial performance, our adjusted EBITDA was in line with our expectations.

關於我們第二季的營運業績，我很高興地說，由於我們工廠團隊對安全的高度重視，本季我們沒有發生可記錄的事件。就財務表現而言，調整後的 EBITDA 符合我們的預期。

Pricing was once again down year over year. However, we believe we have seen our end market pricing stabilize. And in fact, the fertilizer summer fill pricing clearly supports that.

價格再次同比下降。然而，我們相信我們的終端市場定價已經穩定。事實上，化肥夏季填充定價顯然支持了這一點。

During the second quarter, we generated solid free cash flow. And that, combined with our strong cash position, allowed us to repurchase our stock and continue to reduce our debt. Lastly, on our low-carbon ammonia initiatives, our two projects remain on track, and I'll provide more color on both later in the call.

在第二季度，我們產生了穩定的自由現金流。再加上我們強大的現金狀況，使我們能夠回購股票並繼續減少債務。最後，關於我們的低碳氨計劃，我們的兩個項目仍在正常進行中，我將在稍後的電話會議中提供更多關於這兩個項目的資訊。

Now I'll turn over the call to Damien, who will discuss our new ANS contract and review the current market dynamics and pricing trends. Damien?

現在我將把電話轉給 Damien，他將討論我們的新 ANS 合約並審查當前的市場動態和定價趨勢。達米安？

Thanks, Mark, and good morning, everyone. On page 5, you'll find a summary of our low-carbon ammonium nitrate solution or ANS off-take agreement with Freeport Minerals. This is a five-year agreement for up to 150,000 short tonnes per year of low-carbon ANS that we'll be producing at our El Dorado facility.

謝謝，馬克，大家早安。在第 5 頁，您將找到我們的低碳硝酸銨解決方案或與 Freeport Minerals 簽訂的 ANS 承購協議的摘要。這是一項為期五年的協議，我們將在埃爾多拉多工廠生產每年最多 150,000 短噸的低碳 ANS。

Our offtake agreement with Freeport starts at the beginning of 2025, at which time we'll be providing them with conventional ANS. Then we will phase in the low-carbon product upon completion of our El Dorado carbon capture and sequestration project.

我們與 Freeport 的承購協議將於 2025 年初開始，屆時我們將為他們提供傳統的 ANS。然後，我們將在埃爾多拉多碳捕獲和封存專案完成後分階段採用低碳產品。

We expect that low carbon production to come online in early 2026. We're excited about this agreement because not only does it move us closer towards attaining our vision of becoming a leader in the global energy transition, but it also advances our strategy to shift a greater portion of our sales mix towards more stable, predictable, contractual arrangements in our industrial end markets, further offsetting the volatility of spot pricing prevalent in our agricultural end market.

我們預計低碳生產將於 2026 年初上線。我們對這項協議感到很興奮，因為它不僅使我們更接近實現成為全球能源轉型領導者的願景，而且還推進了我們的策略，將我們的銷售組合的更大一部分轉向更穩定、可預測、更穩定的方向。

Page 6 provides some key dynamics at play in our industrial end markets. Overall demand remained steady in our industrial business, reflecting the continued strength of the US economy and the contractual nature of our customer relationships. Our nitric acid is a critical input into the production of polyurethane.

第 6 頁提供了我們工業終端市場中發揮作用的一些關鍵動態。我們的工業業務的整體需求保持穩定，反映出美國經濟的持續強勁和我們客戶關係的合約性質。我們的硝酸是聚氨酯生產的關鍵原料。

Polyurethane, in turn, is a primary material in homebuilding and furnishings as well as auto manufacturing. As depicted in the top two charts, trends in US homebuilding and auto production and furniture manufacturing, while having some movement up and down throughout the past year, have been generally stable over the past two years.

反過來，聚氨酯是住宅建築、家具以及汽車製造的主要材料。正如前兩張圖表所示，美國住宅建築、汽車生產和家具製造的趨勢雖然在過去一年中出現了一些上下波動，但在過去兩年中總體保持穩定。

However, a reduction in interest rates later this year could stimulate consumer demand in both markets, leading to production rate increases and greater demand for nitric acid in 2025. Additionally, we are seeing opportunities develop to support government efforts to increase semiconductor manufacturing in the US.

然而，今年稍後利率的降低可能會刺激兩個市場的消費者需求，從而導致生產力提高和 2025 年硝酸需求增加。此外，我們也看到了支持政府增加美國半導體製造的機會。

Increased munitions production in the US is also supporting demand for some of our specialized assets. Overall, we find the outlook for nitric acid very encouraging.

美國彈藥產量的增加也支持了對我們一些專業資產的需求。總體而言，我們發現硝酸的前景非常令人鼓舞。

With respect to the ammonium nitrate that we produce for the North American markets, we are significantly levered to the production of copper and aggregates. As the chart on the bottom right shows, copper production has increased significantly over the past year. Additionally, copper prices have been strong and sit above multiyear average levels, driven in part by demand for electric vehicle production and the buildout of technology infrastructure.

就我們為北美市場生產的硝酸銨而言，我們對銅和骨材的生產有很大的槓桿作用。如右下圖所示，過去一年銅產量大幅增加。此外，銅價一直堅挺，高於多年平均水平，部分原因是電動車生產需求和技術基礎設施建設。

Aggregates production is strongly correlated to new housing starts, given the infrastructure required to support holding developments. As I mentioned, we believe that what is now appearing to be a likely reduction in interest rates possibly before the end of this year could stimulate new home starts, thus raising demand for aggregates.

考慮到支持控股開發所需的基礎設施，骨料生產與新房開工密切相關。正如我所提到的，我們認為，目前看來，今年年底前利率可能會下降，這可能會刺激新屋開工，從而提高對總量的需求。

On page 7 of our presentation, you'll find information pertaining to nitrogen product prices and natural gas input costs. Ammonia prices sit at healthy levels for this time of year due in part to a healthy summer fill program and natural gas supply issues in Trinidad and Egypt, which constrained global supply.

在我們簡報的第 7 頁上，您將找到有關氮氣產品價格和天然氣輸入成本的資訊。每年這個時候，氨價格保持在健康水平，部分原因是夏季填充計劃良好，以及特立尼達和埃及的天然氣供應問題限制了全球供應。

UAN prices have come down since earlier in the year as is seasonally typical. We saw an early but healthy summer fuel campaign, which has positioned us well through to early fall. We believe that steady prices for urea, together with somewhat tight inventory levels due to a number of turnarounds taking place in the coming months should keep UAN prices relatively stable through the balance of the year.

自今年初以來，UAN 價格一直在下降，這是季節性的典型現象。我們看到了一個早期但健康的夏季燃料運動，這使我們能夠很好地度過初秋。我們認為，尿素價格穩定，加上未來幾個月發生的多次週轉導致庫存水準略為緊張，將使尿素價格在今年餘下時間保持相對穩定。

On the input cost side of the equation, the middle chart shows the natural gas price trend for the European TTF relative to the price for US Henley Hub. After rising through the screen, European gas prices retracted somewhat over the past month but remain at elevated levels. These high European gas prices continue to underpin global ammonia and nitrogen prices and advantaged US producers.

在等式的投入成本方面，中間的圖表顯示了歐洲 TTF 相對於美國亨利中心價格的天然氣價格趨勢。在經歷了上漲之後，歐洲天然氣價格在過去一個月有所回落，但仍處於較高水平。歐洲天然氣價格居高不下，持續支撐全球氨和氮價格，並使美國生產商受益。

On page 8, we show pricing trends and forecasts for corn and other grain prices, which drive our agricultural business. US corn prices have fallen over the past two years as global demand, particularly from China, has declined. Exacerbating the weakness has been the USDA's forecast for 2024 acres planted of 91.5 million acres, down from last year, but still above the 10-year average, suggesting an increase in corn supply.

在第 8 頁，我們顯示了玉米和其他穀物價格的定價趨勢和預測，這推動了我們的農業業務。過去兩年，由於全球需求（尤其是中國需求）下降，美國玉米價格下跌。美國農業部預測 2024 年播種面積為 9,150 萬英畝，比去年有所下降，但仍高於 10 年平均水平，這表明玉米供應量增加，這加劇了玉米供應的疲軟。

We believe this estimate could be higher due to wet weather in certain corn-growing regions. Additionally, ethanol production has moved back towards pre-pandemic levels, providing further support for corn prices. We believe that corn prices should rebound to a level that should motivate farmers to maximize yields through the application of nitrogen fertilizers.

我們認為，由於某些玉米種植地區天氣潮濕，這項估計可能會更高。此外，乙醇產量已回到大流行前的水平，為玉米價格提供進一步支撐。我們認為，玉米價格應該會反彈到一定水平，從而激勵農民透過施用氮肥來最大限度地提高產量。

Corn futures suggest this is the cash with contract prices approaching around $4.50 per bushel by the middle of 2025. As we look to both sides of our business, we expect fundamentals for nitrogen producers to remain attractive and stable for the foreseeable future.

玉米期貨表明，到 2025 年中期，合約價格將接近每蒲式耳約 4.50 美元。當我們著眼於業務雙方時，我們預期氮肥生產商的基本面在可預見的未來將保持吸引力和穩定。

Now I'll turn the call over to Cheryl to discuss our second quarter financial results and our outlook. Cheryl?

現在我將把電話轉給謝麗爾，討論我們第二季的財務表現和前景。謝麗爾？

Thanks, Damien, and good morning. On page 9, you'll see a summary of our second-quarter 2024 financial results. We generated adjusted EBITDA of $41 million and EPS of $0.13 for the second quarter. Page 10 bridges our second-quarter 2023 adjusted EBITDA of $47 million to our second-quarter 2024 adjusted EBITDA of $41 million.

謝謝，達米安，早安。在第 9 頁，您將看到我們 2024 年第二季財務業績的摘要。第二季調整後 EBITDA 為 4,100 萬美元，每股收益為 0.13 美元。第 10 頁將我們 2023 年第二季調整後 EBITDA 的 4,700 萬美元與 2024 年第二季調整後 EBITDA 的 4,100 萬美元連結起來。

Weaker selling prices relative to the prior year were once again a factor in the year-over-year change in EBITDA. However, the year-over-year decline in selling prices was much smaller in the second quarter than it has been for the previous several quarters. We view this as an indication of a stabilization in our markets, particularly in the ag market.

與前一年相比，銷售價格疲軟再次成為 EBITDA 同比變動的因素。然而，第二季銷售價格年減幅遠小於前幾季。我們認為這表明我們的市場，特別是農業市場趨於穩定。

Sales volumes of our products decreased in the second quarter of 2024 as compared to the same quarter of 2023 as a result of lower sales volumes of HCM. This was a result of wet weather in key markets for this product in late May and June.

由於 HCM 銷量下降，我們的產品銷售在 2024 年第二季較 2023 年同季有所下降。這是該產品五月下旬和六月主要市場潮濕天氣的結果。

Also impacting our sales volumes was the timing of agricultural ammonia demand, which was heavier than average in the first quarter of 2024, translating into lower orders during the second quarter. The lower pricing and volumes were partially offset by materially lower natural gas costs as compared to last year.

農用氨需求的時機也影響了我們的銷量，2024 年第一季農用氨需求量高於平均水平，導致第二季訂單減少。與去年相比，天然氣成本大幅下降，部分抵銷了較低的價格和銷售量。

Page 11 provides a summary of our key balance sheet and cash flow metrics. We continue to use our strong cash position as an opportunity to further derisk our balance sheet. In the second quarter, we repurchased $64 million of our notes. And year to date, we've repurchased $97 million of debt.

第 11 頁總結了我們的主要資產負債表和現金流量指標。我們繼續利用強大的現金狀況作為進一步降低資產負債表風險的機會。第二季度，我們回購了 6,400 萬美元的票據。今年迄今為止，我們已回購了 9,700 萬美元的債務。

We also repurchased approximately 800,000 shares of our stock during the second quarter and approximately 1.5 million shares year to date. As we move through the second quarter of this year, our capital allocation will be squarely focused on our facilities.

我們也在第二季回購了約 80 萬股股票，年初至今回購了約 150 萬股股票。隨著今年第二季的到來，我們的資本配置將主要集中在我們的設施上。

As a reminder, we have turnaround scheduled at our prior and Cherokee facilities in the second half of this year. These turnarounds will be integral to our goal to improve plant reliability and efficiency, which we expect to lead to greater production volumes post turnaround.

提醒一下，我們已計劃在今年下半年對先前的工廠和切羅基工廠進行週轉。這些改造將是我們提高工廠可靠性和效率的目標不可或缺的一部分，我們預計這將導致改造後產量更大。

Looking to the third quarter of 2024, Tampa ammonia increased $60 per ton to $475 per metric ton for August, and NOLA UAN is currently around $205 per ton. We expect prices for both products to be higher than the same quarter last year as a result of relatively tight inventories and ongoing global supply constraints from the impact of turnarounds and unscheduled downtime at plants globally.

展望2024年第三季度，8月坦帕氨價格上漲60美元/噸至475美元/噸，NOLA UAN目前約205美元/噸。我們預計這兩種產品的價格將高於去年同期，因為庫存相對緊張，以及全球工廠檢修和計劃外停機的影響導致全球供應持續受到限制。

Additionally, we expect our profitability to benefit from lower natural gas costs, which averaged approximately $2.70 per MMBtu in July, well below last year and a trend we expect to continue. We expect our third-quarter results to reflect the impact of the seasonal slowdown in demand on our sales volumes.

此外，我們預計我們的獲利能力將受益於較低的天然氣成本，7 月平均約為每 MMBtu 2.70 美元，遠低於去年，我們預計這一趨勢將持續下去。我們預期第三季業績將反映需求季節性放緩對銷售的影響。

Additionally, we have a 30-day turnaround underway at our prior facility that will reduce our ammonia and UAN production by approximately 20,000 tonnes and 35,000 tons, respectively. We expect to incur approximately $15 million in turnaround expense during the third quarter as we execute the prior turnaround and gear up for our Cherokee turnaround currently scheduled for the fourth quarter.

此外，我們先前的工廠正在進行為期 30 天的檢修，這將使我們的氨和 UAN 產量分別減少約 20,000 噸和 35,000 噸。我們預計第三季將產生約 1500 萬美元的周轉費用，因為我們執行先前的周轉並為目前計劃在第四季度進行的切諾基週轉做好準備。

Despite the lower production during the third quarter resulting from our prior turnaround, we expect our third-quarter EBITDA when adjusted to add back turnaround expense to be materially above our third quarter of 2023 as a result of higher selling prices combined with lower natural gas and other costs.

儘管我們先前的周轉導致第三季度產量下降，但我們預計，由於銷售價格上漲以及天然氣和天然氣價格下降，經過調整以增加週轉費用後，我們第三季度的EBITDA 將大幅高於2023 年第三季度的水平。

And now I'll turn it back over to Mark.

現在我會把它轉回給馬克。

Thank you, Cheryl. Pages 12 and 13 pertain to the two low-carbon ammonia projects that we currently have underway. Page 12 summarises the key information related to our project with Lapis Energy at our El Dorado facility. This project remains on track with the timeline we discussed back in early May.

謝謝你，謝麗爾。第 12 頁和第 13 頁涉及我們目前正在進行的兩個低碳氨項目。第 12 頁總結了與我們在埃爾多拉多工廠的 Lapis Energy 專案相關的關鍵資訊。該項目仍按我們五月初討論的時間表進行。

We continue to discuss the value of low carbon products with potential customers and are encouraged by the level of engagement we're experiencing. Page 13 summarizes the key aspects of our Houston Ship Channel project that we currently have under development with several partners.

我們繼續與潛在客戶討論低碳產品的價值，並對我們所經歷的參與程度感到鼓舞。第 13 頁總結了我們目前與多個合作夥伴正在開發的休士頓船舶航道專案的關鍵方面。

This is a world-scale ammonia plant that will produce approximately 1.1 million metric tons of low-carbon ammonia. We are working with Samsung Engineering and our partner INPEX to complete our pre-FEED and we expect to receive preliminary results by the end of the third quarter, followed by a detailed review during the fourth quarter.

這是一座世界規模的合成氨廠，將生產約110萬噸低碳氨。我們正在與三星工程和合作夥伴 INPEX 合作完成預回饋，預計在第三季末收到初步結果，然後在第四季進行詳細審查。

It is anticipated that FEED will begin early in the first quarter of 2025 be completed by the end of next year with FID in the first quarter of 2026. We are having ongoing conversations with potential customers to secure long-term off take for the anticipated ammonia production and remain encouraged with those conversations.

預計FEED將於2025年第一季初開始，並於明年底完成，最終投資決定將於2026年第一季完成。我們正在與潛在客戶進行持續對話，以確保預期氨生產的長期承購，並繼續鼓勵這些對話。

While Asia remains a target region for off-takers, we've been pleased to find that Europe is emerging as an increasingly fertile market for low-carbon ammonia given the reasons challenges in increasing clean energy generation as quickly as initially planned and the impending enactment of the EU's carbon border adjustment mechanism or CBAM.

雖然亞洲仍然是承購商的目標地區，但我們很高興地發現，鑑於按照最初計劃盡快增加清潔能源發電以及即將頒布的法案所面臨的挑戰，歐洲正在成為一個日益肥沃的低碳氨市場。碳邊界調整機制（CBAM）。

We're very excited about the prospects for driving the growth of our top and bottom line through our participation in the developing low carbon nitrogen products markets. Our vision is to become one of the leading suppliers of low-carbon ammonia and derivative products to the power generation, marine, and other industries in the coming years. And we believe we have the knowledge, expertise, assets, and relationships to achieve this vision.

我們對透過參與發展中的低碳氮產品市場來推動我們的收入和利潤成長的前景感到非常興奮。我們的願景是在未來幾年成為發電、船舶和其他行業低碳氨及其衍生產品的領先供應商之一。我們相信我們擁有實現這一願景的知識、專業知識、資產和關係。

While our long-term vision is centered around low carbon product opportunities, from a near-term perspective, we are more focused than ever on our opportunities to improve our current operations, which we expect will lead to higher production and sales volumes, enabling us to capitalize on the operating leverage inherent in our business and drive increased profitability and shareholder value.

雖然我們的長期願景以低碳產品機會為中心，但從近期角度來看，我們比以往任何時候都更加關注改善當前營運的機會，我們預計這將帶來更高的產量和銷量，使我們能夠利用我們業務固有的營運槓桿，提高獲利能力和股東價值。

Combining these enhancements to our core operations with our low carbon activities, we believe we are well positioned to generate significant value for our shareholders.

將我們核心業務的這些增強與我們的低碳活動相結合，我們相信我們有能力為股東創造巨大的價值。

Before we open it up for questions, I'd like to mention that we will be participating in the following conferences in September: the Jefferies Industrial Conference in New York on September 4; the UBS Materials Conference also in New York on September 5; and the RPC Industrials Conference in Las Vegas on September 24. We look forward to speaking with some of you at those events.

在我們開始提問之前，我想提一下，我們將參加 9 月的以下會議： 9 月 4 日在紐約舉行的 Jefferies 工業會議； 9 月 5 日也在紐約舉行的瑞銀材料會議；以及 9 月 24 日在拉斯維加斯舉行的 RPC 工業會議。我們期待在這些活動中與你們中的一些人交談。

That concludes our prepared remarks, and we will now be happy to take your questions. Thank you.

我們準備好的演講到此結束，現在我們很樂意回答您的問題。謝謝。

(Operator Instructions) Joshua Spector, UBS.

（操作員說明）Joshua Spector，UBS。

Hi. Good morning. This is Lucas Beaumont on for Josh. I just wanted to start with the new agreement you signed with Freeport Minerals for the uptake. Do you guys -- did you get your premium there on the low-carbon products? Or was that sort of in line with sort of the current pricing for the gray product?

你好。早安.我是盧卡斯·博蒙特（Lucas Beaumont）為喬許（Josh）代言。我只想從你們與自由港礦業公司簽署的新協議開始。你們——你們在低碳產品上得到了溢價嗎？或者這是否符合灰色產品的當前定價？

And if sort of if you didn't, is there any mechanisms or adjust that over time as the market develops further? Or how are you kind of thinking about that now?

如果您沒有這樣做，是否有任何機製或隨著市場的進一步發展而進行調整？或者你現在怎麼想這個？

Good morning, Luca. How are you? So yes, we feel like our customer realized the value of the low carbon aspect of our product. And so we feel like we've got some premium to what we would consider to be the gray market today.

早安，盧卡。你好嗎？所以，是的，我們覺得我們的客戶意識到了我們產品低碳的價值。因此，我們覺得我們現在的灰色市場比我們認為的灰色市場有一些溢價。

All right, thanks. Great. And then just wanted to talk about the seasonality a little bit maybe on the gas cost side. So we've had some sort of a normal seasonality this year with low pricing and then pricing coming up.

好的，謝謝。偉大的。然後只想談談天然氣成本方面的季節性。因此，今年我們經歷了某種正常的季節性，價格較低，然後價格上漲。

And you guys obviously saw the benefit of that in the second quarter with your realized costs coming in quite a bit below where the benchmarks were with the lag. So I just wonder if you can kind of help frame how you think that dynamic is going to impact the third quarter for us.

你們顯然在第二季度看到了這樣做的好處，你們的已實現成本遠低於滯後的基準水準。所以我只是想知道您是否可以幫助說明您認為這種動態將如何影響我們第三季。

Yes. Good morning, Lucas. So yes, so with the gas costs specifically, we did see a run-up in gas costs at the end of June that's going to come through in July. And then gas costs heading into August is, I would say, $0.40 to $0.50 cheaper than the $2.70 that we realized in July. So we are seeing some additional benefit and pick up of lower gas costs here in the third quarter.

是的。早上好，盧卡斯。所以，是的，特別是天然氣成本，我們確實在 6 月底看到天然氣成本的上漲，並將在 7 月出現。我想說，進入 8 月的天然氣成本比我們 7 月意識到的 2.70 美元便宜 0.40 美元到 0.50 美元。因此，我們在第三季看到了一些額外的好處和天然氣成本降低的回升。

I think it actually -- we've talked about this previously about the change in strategy and really thought process when it comes to gas and not really purchasing forward too much other than for forward sales of products. So we are now able to realize the benefits because we're basically going month to month.

我認為實際上 - 我們之前已經討論過關於天然氣的戰略和真正的思維過程的變化，除了產品的遠期銷售之外，並沒有真正購買太多。所以我們現在能夠實現這些好處，因為我們基本上是按月進行的。

Great. Thank you.

偉大的。謝謝。

Laurence Alexander, Jefferies.

勞倫斯·亞歷山大，杰弗里斯。

Hi. This is Dan Rizzo is on for Lawrence. With the new agreement, you mentioned up to 150,000 short tons. I was wondering -- and I'm sorry if this was said, but is there any minimum requirement they have to take each year?

你好。這是勞倫斯的丹·里佐。在新協議中，您提到最多15萬短噸。我想知道 - 如果有人這麼說，我很抱歉，但是他們每年必須滿足任何最低要求嗎？

Damien, why don't you answer that?

達米安，你為什麼不回答這個問題？

Yeas, good morning. Look, I can't go into the specifics, but there are sort of traditional mechanisms in the arrangement that -- where there's minimums and off-take collants, et cetera. So we've got a pretty clear line of sight as to what the offtake will be and what we'd expect going forward.

是的，早安。聽著，我不能透露細節，但安排中有一些傳統的機制——有最低限度和承購要求，等等。因此，對於承購情況以及我們對未來的期望，我們已經有了非常清晰的認識。

Would you say that it's got traditional TOP terms?

你會說它有傳統的 TOP 術語嗎？

Yeah.

是的。

Okay. And then for my second question, just in regards to ag. I was just wondering what percentage of your sales is for post ag -- sorry, post planting application? Like how important is August and September, if at all?

好的。然後是我的第二個問題，只是關於ag。我只是想知道你們的銷售額中有多少百分比用於後農業 - 抱歉，後種植應用程式？例如八月和九月有多重要（如果有的話）？

Look, I can't quote you an exact percentage, but the fall ammonia application season is relatively important. We've got a reasonable order book going forward coming out of the summer fill and some full prepay sales. But we've got our turnaround at prior at the moment. So our participation is probably a little lower than what it's typically been. But we're pretty comfortable with where we're sitting from an orders perspective.

看，我無法給您確切的百分比，但秋季氨施用季節相對重要。我們已經在夏季訂單中獲得了合理的訂單，並進行了一些全額預付款銷售。但目前我們已經有了轉機。因此，我們的參與度可能比平常低。但從訂單的角度來看，我們對目前的情況感到非常滿意。

Thank you very much.

非常感謝。

Andrew Wong, RBC Capital Markets.

安德魯‧黃（Andrew Wong），加拿大皇家銀行資本市場部。

Hey. Good morning. So ammonium nitric prices have performed quite well. So could you just talk about what's happening there? Why the significant premium has come back, and what's your outlook on hand versus some of the other nice share products?

嘿。早安.所以硝酸銨價格表現還是不錯的。那麼您能談談那裡發生的事情嗎？為什麼顯著的溢價又回來了？

Yeah. Good morning, Andrew. Yeah, look, the premium, we're pretty happy with that and the pricing that we're able to achieve. Look, really, it's probably just driven by typical supply demand. Demand was pretty reasonable.

是的。早安，安德魯。是的，看，溢價，我們對此以及我們能夠實現的定價感到非常滿意。看起來，實際上，這可能只是由典型的供應需求所驅動的。需求相當合理。

And at certain times of the year, that premium can push up relative to some of the other products. It can also go the other way, and we can see the premium narrow. And at this time of the year, we will see it narrow closer to the cents per pound for the other products. And that again, is really due to just the timing of the year and where we're at in the cycle.

在一年中的某些時候，相對於其他一些產品，溢價可能會上漲。也可能是相反的情況，我們可以看到溢價縮小。每年的這個時候，我們會看到其他產品的價格縮小到每磅美分。再說一次，這實際上是由於一年中的時間和我們所處的周期而決定的。

Okay. And then maybe just switching to the pneumonia side of things. I was just curious regarding the Lotus partnership at El Dorado. What happened is due to the payments if there's a change to the 45Q credits either up or down? And do you see any risk of that happening if there's a new administration that comes in with a different view on the energy?

好的。然後也許只是轉向肺炎方面。我只是對蓮花在埃爾多拉多的合作關係感到好奇。如果 45Q 積分發生向上或向下變化，會發生什麼情況？如果新政府對能源有不同的看法，您認為這種情況發生的風險嗎？

Good morning, Andrew. So it's a great question. We get that question all the time, everyone is really focused on the election and some implications of that. When you think about the IRA, I think our view is there are definitely parts of the IRA that are more at risk than others.

早安，安德魯。所以這是一個很好的問題。我們一直收到這個問題，每個人都非常關注選舉及其影響。當你想到 IRA 時，我認為我們的觀點是 IRA 中肯定有一部分比其他部分面臨更大的風險。

And so when you start thinking about the EV incentives and things around electric vehicles, I think most people think that there's definitely some risk of rollback there. When it comes to 45Q, I think the conventional thought and certainly our thoughts as well, 45Q has been around for a while, so it's not something that's new.

因此，當你開始考慮電動車激勵措施和電動車相關問題時，我認為大多數人都認為肯定存在一些回滾的風險。說到 45Q，我認為傳統的想法，當然還有我們的想法，45Q 已經存在了一段時間，所以它不是什麼新鮮事。

What the IRA did is really two main things. It increased it for sequestration from $50 a ton to $85 a ton of CO2. And then it also changed the first five years of eligibility from a tax credit to cash pay. So I don't know that I see those really changing. If they really -- if the government really wants to incentivize and continue to support decarbonization even at $85 a ton of cash pay or tax credit, certain volume -- below certain volumes are just not economical.

愛爾蘭共和軍所做的其實有兩件事。它將二氧化碳封存費用從每噸 50 美元增加到每噸 85 美元。然後，它還將前五年的資格從稅收抵免改為現金支付。所以我不知道我是否看到這些真的改變了。如果他們真的——如果政府真的想激勵並繼續支持脫碳，即使每噸85美元的現金支付或稅收抵免，一定數量——低於一定數量是不經濟的。

And so now if you went down to $50 a ton, I think you'd see a number of projects. In fact, I would venture to say most of the projects that are canceled.

所以現在如果你的價格降到每噸 50 美元，我想你會看到很多項目。事實上，我敢說大多數項目都被取消了。

So I don't see that happening. Could they change cash pay in the first five years back to a tax credit? Possibly, you could see that. The other thing to keep in mind is most of the activity, most of the new plants that have been announced and new plants equate to new jobs and lots of contractors coming in and lots of equipment being bought are all in the Gulf region. And so those are two republic and supported states.

所以我不認為這種情況會發生。他們能否將前五年的現金工資改回稅收抵免？也許，你可以看到這一點。另一件需要記住的事情是大部分活動，大多數已宣布的新工廠和新工廠相當於新的就業機會，大量承包商的進來和大量購買的設備都在海灣地區。這是兩個共和國和受支持的國家。

And the last thing I would say is the IRA in general, maybe there are certain parts of it that warrant bipartisan, but generally speaking, the IRA was pretty supported by both parties.

我要說的最後一件事是愛爾蘭共和軍的整體情況，也許它的某些部分需要兩黨合作，但總的來說，愛爾蘭共和軍得到了兩黨的相當支持。

So I think when you take a step back, I don't see 45Q having dramatic changes that would impact our project. I do think that there is some vulnerability on EV, as I said, and then 45V, which is for green hydrogen and green ammonia.

所以我認為當你退後一步時，我不認為 45Q 會發生會影響我們專案的巨大變化。正如我所說，我確實認為電動車存在一些脆弱性，然後是適用於綠氫和綠色氨的 45V。

Okay, great. That's really good color. Thank you.

好的，太好了。這顏色確實不錯啊謝謝。

(Operator Instructions) Rob McGuire, Granite Research.

（操作員說明）Rob McGuire，Granite Research。

Good morning. Thank you for taking my questions. With regards to your five-year Freeport agreement, can you discuss your existing ANS capacity? Any investments that you might need in order to fill this upcoming agreement?

早安.感謝您回答我的問題。關於你們的五年自由港協議，你們能討論一下你們現有的 ANS 能力嗎？為了履行即將簽訂的協議，您可能需要任何投資？

Yeah, good morning, Rob. We've had to make some investments, excuse me, to support this arrangement. We do have the capacity. The capacity already exists, but the investments have been around storage, rail, and loading capacity. So we're making that at the moment, and that will be ready and commissioned ahead of the start-up of the contract.

是的，早安，羅布。對不起，我們必須進行一些投資來支持這項安排。我們確實有這個能力。產能已經存在，但投資主要圍繞著儲存、鐵路和裝載能力。所以我們現在正在做這個，並將在合約啟動之前準備好並投入使用。

Thank you. And Damien, does this supply agreement replace a gray nitrogen supply agreement? Or is this brand-new business?

謝謝。達米恩（Damien），這份供應協議是否會取代灰氮供應協議？或者說這是一項全新的業務？

Well, it's probably both. I mean obviously, it's a brand-new ammonium or ANS solution business for us. And we will move our product mix around to accommodate it. But yeah, we are transitioning our gray product over to low carbon when the carbon capture project is commissioned.

嗯，可能兩者都是。我的意思是，顯然，這對我們來說是一項全新的銨或 ANS 解決方案業務。我們將調整我們的產品組合以適應它。但是，是的，當碳捕獲專案投入使用時，我們正在將灰色產品轉變為低碳產品。

Great. Thank you. And then the EPA indicating a final decision next spring on the Class 6 application. Can you discuss what the final decision is relative to the permit being issued expected in the second half of this year?

偉大的。謝謝。然後 EPA 將在明年春天對 6 類申請做出最終決定。您能否討論一下最終決定與預計今年下半年發放的許可證有關？

Oh, are you asking me what it will take to get approval, Rob?

哦，你是在問我需要什麼才能獲得批准嗎，羅布？

Yeah. I'm trying to just define what are you looking at in terms of that final decision? I know you're looking for a permit being approved in the second half of this year. And I believe that's one of the next milestones but can you just sort of lay out the milestones and explain that part?

是的。我想明確一下您在最終決定中所考慮的是什麼？我知道您正在尋求今年下半年獲得批准的許可證。我相信這是下一個里程碑，但您能否列出里程碑並解釋這一部分？

Yeah. So I think what we're really looking for by November of this year is a sign-off on the technical review. So once we have that and EPA signed off on their technical review, then it's actually drafting permits.

是的。因此，我認為我們真正希望在今年 11 月之前簽署技術審查。因此，一旦我們得到了這一點並且美國環保署簽署了他們的技術審查，那麼它實際上正在起草許可證。

There's a public comment period. So there's about 60 days of drafting the permit. There's another 45 days of public comment period. And then, of course, there's another 45 to 60 days of drafting final permitting.

有一個公眾評議期。所以起草許可證需要大約 60 天的時間。還有 45 天的公眾評議期。當然，接下來還需要 45 到 60 天的時間來起草最終許可。

So what that permit would be in May would be a permit to construct. So that would allow us to drill. And then, of course, they take core samples and as long as those core samples match the work that was done in a technical review, the knee pay would sign off and allow us to inject into the sequestration well.

因此，五月的許可證將是施工許可證。這樣我們就可以進行鑽探。然後，當然，他們會採集岩心樣本，只要這些岩心樣本與技術審查中所做的工作相匹配，膝蓋工資就會簽署並允許我們注入封存井。

No, I appreciate that. I think I got a permit to construct a little confused with permit to inject. But is the permit to stock still coming in the second half of this year?

不，我很欣賞這一點。我認為我獲得了建造許可證，這與注入許可證有點混淆。但今年下半年還能拿到庫存許可嗎？

No, the technical review would happen in November. And then we're hoping, and we'll see how the EPA's process works, but we're hoping to pull in kind of May permit to construct a little bit forward.

不，技術審查將在 11 月進行。然後我們希望，我們會看到 EPA 的流程如何運作，但我們希望能獲得 5 月的許可，以便向前邁進一點。

We think that given Louisiana got primacy at the end of last year and a lot of the draft permits or the permit applications were in the region 6 office of the EPA and then now moved to Louisiana, and that was the bulk of the projects that given the now shrinking number of Class 6 permits at the EPA Dallas office, region 6 office, that that will help us out and hopefully speed up the timing a little bit.

我們認為，鑑於路易斯安那州在去年年底佔據了主導地位，並且許多許可證草案或許可證申請都在美國環保局的第6 區辦公室，然後現在轉移到了路易斯安那州，而這就是給予路易斯安那州的大部分專案EPA 達拉斯辦事處、第 6 區辦事處的 6 級許可證數量現在正在減少，這將幫助我們擺脫困境，並希望能加快一點時間。

Thanks, Mark. I appreciate that. And with regards to deleveraging and repurchasing shares, so first off, nice job on that. Where does that leave your existing authorization from the Board with regards to repurchasing debt in the shares?

謝謝，馬克。我很欣賞這一點。關於去槓桿化和回購股票，首先，做得很好。這對董事會關於回購股份債務的現有授權有何影響？

Well, from a debt standpoint, it's really not an authorization that's needed. We will talk to the Board and make a recommendation, and the Board will approve it or not approve it. When it comes to the share buyback authorization.

嗯，從債務的角度來看，這確實不需要授權。我們將與董事會討論並提出建議，董事會將批准或不批准。當涉及股票回購授權時。

North of $100 million remaining.

剩餘金額超過 1 億美元。

Yeah. So we still have plenty of opportunity and plenty of room to buy back stock should that make sense for us.

是的。因此，如果這對我們有意義的話，我們仍然有足夠的機會和足夠的空間回購股票。

Okay. I appreciate that on. And then also maybe on capital allocation, just can you discuss the M&A environment? And with all your projects in place deleveraging, returning cash to shareholders, are potential acquisitions very high on the priority list at this point?

好的。我很欣賞這一點。然後也許在資本配置方面，您能討論一下併購環境嗎？隨著您所有去槓桿化項目的到位，向股東返還現金，目前潛在的收購是否處於優先考慮的位置？

Well, I don't know about high on the list. I think we look at all opportunities to grow the company, whether that's our internal reliability program that we think adds a lot of value. So we're really focused on that.

好吧，我不知道名單上的高位。我認為我們會考慮所有發展公司的機會，無論是我們認為會增加許多價值的內部可靠性計劃。所以我們非常關注這一點。

And then as you mentioned, the two projects and getting them up and running or getting certainly the carbon capture and sequestration project at El Dorado actually up and running and operating and then our other project, the inflection point for us ultimately will be FID. So looking at getting to that point.

然後，正如您所提到的，這兩個項目並讓它們啟動並運行，或者讓埃爾多拉多的碳捕獲和封存項目實際啟動、運行和運營，然後是我們的另一個項目，我們的拐點最終將是最終投資決定。所以正在考慮達到這一點。

I do think we are still interested in M&A where we can find strategic assets that make sense for us and support our vision and strategy. So we absolutely will continue to look for those.

我確實認為我們仍然對併購感興趣，因為我們可以找到對我們有意義並支持我們的願景和策略的策略資產。所以我們絕對會繼續尋找那些。

Owning ammonia assets, we think, is really important. And we want to be a larger player within the industry. Having scale, I think, would help us. So I guess, overall, we continue to look for opportunities to merge or combine and that makes a lot of sense for us.

我們認為，擁有氨資產非常重要。我們希望成為業界更大的參與者。我認為，擁有規模會對我們有幫助。所以我想，總的來說，我們繼續尋找合併或合併的機會，這對我們來說很有意義。

That's helpful, Mark. Thank you. Just last question. With regards to your ammonia production rates trending higher over the long term in your initiatives there, could there be a stair-step improvement coming out of the turnarounds this year? I know you're always going to bump up in terms of production coming out of turnaround. But can you just talk about what we might see in terms of improved reliability?

這很有幫助，馬克。謝謝。只是最後一個問題。從長遠來看，你們在那裡的舉措中氨生產率呈上升趨勢，今年的轉變是否會帶來階梯式的改善？我知道，在扭虧為盈後，產量總是會提高。但您能談談我們在可靠性方面可能會看到什麼嗎？

Yeah. Look, I think that we're going to get a bump from going through our prior and Cherokee turnarounds this year. Any time -- when you go -- particularly at Cherokee, when you go three years or switching even to four years between turnarounds. -- you definitely trained into those turnarounds at some lower rates, particularly as catalyst starts to degrade and you get some lower rates.

是的。聽著，我認為今年我們將透過之前和切諾基的轉變而獲得進步。任何時候——當你離開時——尤其是在切諾基，當你在兩次轉型之間轉為三年甚至四年。 - 你肯定會以較低的速度進行這些週轉的訓練，特別是當催化劑開始降解並且你會得到一些較低的速度時。

So I think that we should see absolutely a bump there. Stair step, I'm probably a little trying to be a little cautious on whether it's going to be a stair step or not. We expect this to be significantly improved. And we're doing a lot of work at both of those sites to really improve the reliability. I think the investment that we're making at Pryor is north of $30 million. So it's a large investment for us, and we think it's got significant returns.

所以我認為我們絕對應該看到那裡的碰撞。樓梯台階，我可能對它是否是樓梯台階有點謹慎。我們預計這一情況將顯著改善。我們正在這兩個站點做大量工作，以真正提高可靠性。我認為我們在 Pryor 的投資超過 3000 萬美元。所以這對我們來說是一筆巨大的投資，我們認為它會帶來可觀的回報。

Same thing down -- or at Cherokee later this year, we're making big investments in our ammonia plant. And we think that will actually run much more reliably. We've done a really good -- the teams have done a really good job in keeping our plants running. So the onstream rate has improved dramatically. But the one thing that we need to focus on is getting every ton out of the plants.

同樣的事情發生了——或者今年晚些時候在切羅基，我們正在對我們的合成氨工廠進行大量投資。我們認為這實際上會運行得更加可靠。我們做得非常好——團隊在保持工廠運作方面做得非常好。因此，開工率大幅提高。但我們需要關注的一件事是從植物中充分利用每一噸。

And so I think that's a lot of the turnaround that we're in now is really focused on that. We're also -- we've run really well from an onstream standpoint at El Dorado, ammonia, but probably at a little bit lower rates due to the degradation of our catalyst there.

所以我認為我們現在所經歷的許多轉變都真正集中在這一點上。從埃爾多拉多氨的運行角度來看，我們也運行得非常好，但由於催化劑的降解，速度可能會稍低一些。

And so we are taking a small planned outage to replace the catalyst to get back up to maximum rates. And so we're excited about that to see the improvements that we'll get out of that plant as well.

因此，我們正在計劃進行小規模停機來更換催化劑，以恢復到最高速率。因此，我們很高興看到我們將從該工廠中獲得的改進。

That's really helpful. And I just -- it seems like there's a little more time today, Mark, I wonder one more question. If you can elaborate on what you're seeing in terms of Europe and kind of shifting demand towards low carbon and legislation that might help move that along.

這真的很有幫助。我只是──馬克，今天似乎還有一點時間，我還有一個問題。如果您能詳細說明您在歐洲所看到的情況以及向低碳和立法轉變的需求，這可能有助於推動這一進程。

Yeah. So if you go back 24 months or maybe even as recent as 12 months, I think Europe was very focused on their energy transition being hydrocarbons to zero hydrocarbons, right, so green. And I think the economics of green just broadly don't really make sense today.

是的。因此，如果你回顧 24 個月，甚至最近 12 個月，我認為歐洲非常關注從碳氫化合物到零碳氫化合物的能源轉型，對吧，如此綠色。我認為綠色經濟學在今天基本上沒有意義。

I think the cost of equipment, of course, construction and contractor costs and then efficiencies put ammonia and hydrogen at a rate that makes it a bit cost prohibitive for people to be okay paying for. So I think what we've seen over the last 12 to 18 months is really a little bit of a shift in Europe where they are now focused on a true transition as opposed to, I'll call it, a revolution going from hydrocarbons to no hydrocarbons.

我認為設備成本，當然，建設和承包商成本以及效率使氨和氫的成本過高，人們無法接受。因此，我認為我們在過去 12 到 18 個月中看到的歐洲確實發生了一點轉變，他們現在專注於真正的轉型，而不是我稱之為從碳氫化合物到石油的革命。 。

And so blue has become a lot more of top of mind in a lot of our conversations with European -- potential European off takers. And so that's really exciting for us because now we've got a real market. And a lot of that, not just from a cost perspective and creating a shift change, but also CBAM, which is their carbon border mechanism.

因此，在我們與歐洲潛在承購商的許多對話中，藍色已成為我們最關心的話題。這對我們來說真的很令人興奮，因為現在我們有了一個真正的市場。其中很多，不僅是從成本角度和創造轉變，還有 CBAM，這是他們的碳邊界機制。

And so that's a real tax that's coming into place starting in 2026. And so it will scale in over time from '26 to '30, and we've got a lot of folks that either use ammonia today or are thinking about ammonia as a fuel source to replace coal or even nat gas and looking at that tax and where is the inflection point?

因此，這是一項將於 2026 年開始實施的實際稅收。因此，從 26 年到 30 年，它會隨著時間的推移而擴大，我們有很多人要么現在使用氨，要么正在考慮將氨作為燃料來源來替代煤炭甚至天然氣，並考慮徵收該稅拐點在哪裡？

Like at some point, there needs to be a switch. So again, I think much change in Europe in the way that they're thinking about it, and we're waiting to see what the European regulation and incentive programs look like related to blue versus green.

就像在某個時刻，需要有一個切換。再說一次，我認為歐洲的思考方式發生了很大變化，我們正在等待看看歐洲與藍色和綠色相關的監管和激勵計劃是什麼樣的。

Charles Neivert, Piper Sandler.

查爾斯·尼維特，派珀·桑德勒。

Morning, guys. Just a quick question, in terms of the new contract and the deal with Freeport, et cetera, and the amount of product they're going to be taking, and I'm assuming overall that it's obviously that's a good thing.

早安，夥計們。只是一個簡單的問題，就新合約和與自由港的交易等而言，以及他們將要獲取的產品數量，我認為總的來說，這顯然是一件好事。

But is that going to take away from any other nitrogen product production because you're going to have to be sort of focused more on the AN side? Or that shouldn't be a problem at all. It won't affect ammonia production won't affect your rate or anything else? Is there sort of a trade-off, so to speak, in trying to ramp up production for that?

但這是否會影響任何其他氮產品的生產，因為您必須更加關注 AN 方面？或者說這根本不應該是個問題。它不會影響氨的生產不會影響你的速率或其他什麼？可以說，為此提高產量是否需要某種權衡？

Yeah. Good morning, Charles. Look, it certainly won't affect our ammonia production. But from an ammonium nitrate perspective, yes, there will be a shift in tonnes away from other products and into supporting the contract with Freeport.

是的。早上好，查爾斯。你看，這肯定不會影響我們氨的生產。但從硝酸銨的角度來看，是的，將會有大量噸產品從其他產品轉移到支援與自由港的合約。

Okay. Anything specific on which products get most affected by the ship?

好的。關於哪些產品受船舶影響最大有什麼具體資訊嗎？

No, nothing specific. We'll just manage it through the portfolio.

不，沒有什麼具體的。我們將透過投資組合來管理它。

Okay.

好的。

We have now reached the end of our question-and-answer session. I would like to turn the floor back over to Mark Behrman for closing comments.

我們的問答環節現在已經結束了。我想把發言權交還給馬克·貝爾曼（Mark Behrman）以供結束評論。

Well, thank you, everyone, for your interest in LSB Industries. I hope you can see that we continue to make progress quarter to quarter and also progressing really our long-range growth prospects for the company. So thanks for your support, and we look forward to speaking to you next quarter.

好的，謝謝大家對 LSB Industries 的興趣。我希望您能看到我們每個季度都在繼續取得進展，並且公司的長期成長前景也取得了真正的進展。感謝您的支持，我們期待下個季度與您交談。

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。