Boston, MA 10/29/2013 (wallstreetpr) – Rentech, Inc. (NASDAQ:RTK) is set to announce quarterly results on November 7, 2013. The company licenses proprietary and patented processes for liquefaction of carbon bearing gases, liquids, and solids. The company also wood fibre processing and nitrogen fertilizer manufacturing businesses. The nitrogen fertilizer business is operated by its publicly traded subsidiary – Rentech Nitrogen Partners, L.P. Rentech Inc. owns 60% of Rentech Nitrogen. Rentech Nitrogen is the largest producer of synthetic ammonium sulfate in North America and has two facilities. The wood processing business is operated through Fulghum Fibres. Fulghum Fibres has 32 wood chipping mills, 26 in the U.S. and 6 in South America. Rentech has secured a revolving credit of $100 million for upgrading this business. In line with its aim of disposing of non-core assets, the company had also announced the disposal of 450 acres in Mississippi for $9 million.
The company’s fertilizer business is not doing well. Rentech Nitrogen revised its outlook for the fourth quarter and much of 2014, downwards on October 24, 2013. Changes in cash distribution were also announced. Ammonium Sulphate prices have fallen drastically and are expected to remain at these low levels. Volumes are also expected to remain low. Exports are also not a viable route, as China has restarted exports of nitrogen based fertilizers and internationally the prices have crashed. The company’s Pasadena facility is expected to post negative EBITDA for the fourth quarter. East Dubuque facility has been hit by maintenance related issues and production will be reduced. Lower production would lead to lower sales and costs would increase on account of repair work. The company would not be in a position to distribute dividends in the fourth quarter.
The markets have reacted sharply to this bad news. Investors dumped the company’s stock. The shares were down by 6.91% at the end of trading. They touched the 52 week low of $1.55 per share before recovering slightly to close at $1.75 per share.
