Q3 2023 LSB Industries Inc Earnings Call
Greetings welcome to LSP industries third quarter 2023 earnings conference call.
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At this time I'll turn the conference over to Fred Buonocore, Vice President of Investor Relations. Mr. Ron Clark you may not be yet.
Good morning, everyone. Joining me today are Mark Behrman, our Chief Executive Officer, and Cheryl Maguire, our Chief Financial Officer.
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.
On the call. We will include references to non-GAAP results. Please see the press release in the investors section of our website L. S. B industries Dot com for further information regarding forward looking statements and reconciliations of non-GAAP results to GAAP results.
As a reminder, we have a stockholder rights plan to protect certain tax attributes. Please see the investors section of our website at LSP industries Dotcom for further important details.
At this time I'd like to go ahead and turn the call over to Mark.
Thank you Fred.
As noted on page four of our presentation, our trailing 12 month total recordable injury rate at the end of the third quarter was 0.3 for.
That is a reflection of the focused efforts of our entire team and I'd like to thank them for continuing to embrace this important core value of our company.
Turning to our financial results, we were disappointed with the results of the quarter versus our expectations heading into the quarter.
Our adjusted EBITDA was lower compared to the third quarter of 2022.
Well this is largely due to a decline in market prices for nitrogen products relative to last year.
The results were also impacted by lower than expected downstream production, primarily in nitric acid.
That's somewhat limited our ability to upgrade ammonia impacting our margins for the quarter.
Although we stubbed our toe early in the quarter, our plants have run better since early September with the exception of one of our nitric acid plants at our Pryor facility that had an expand or failure.
We expect that plant to be back in service by the end of November after we receive and install the rebuild expander.
Cheryl will provide more color on the expected impact to our fourth quarter.
We remain focused on our path to top quartile safety and reliability for all plants across our facilities.
We also continued to progress on our growth initiatives in early October we announced a major milestone in the emergence of our company as a leader in the global energy transition.
Our collaboration with impacts their Lockheed and vote back motor to develop a world scale low carbon ammonia production and export facility on the Houston ship channel is potentially transformative lsp's gross profile as demand for clean energy increases we are proud to be partnering with a group of companies of this caliber more than this.
Later.
As you May recall, we submitted a project to expand our El Dorado facility with estimated cost of approximately $400 million.
The USDA initially proposed to fund 25% of estimated project cost with 100 million dollar maximum for an individual project.
We recently learned that our project has been selected to receive funding under the U S. D. A fertilizer production expansion program. However, the total amounts of the funds requested by all the projects submitted to the U S. D. A exceeded the total funds available under the program in the U S. D. A elected to fund each project they selected at 80% of their requests.
That amount.
Therefore, assuming our project costs remain at approximately $400 million would we would receive a grant of approximately $80 million.
We continue to evaluate and refine the scope cost and timing for this project and look forward to providing a more detailed update on our fourth quarter conference call.
Please keep in mind that the final approval for the funding is subject to the successful completion of an environmental assessment, which is underway and expected to be completed in the first quarter of 'twenty 'twenty four indoor acceptance of the terms and conditions of the grant documents, which we have not seen yet.
On page five of our presentation, we provide an overview of our end markets.
Corn prices remain above multiyear averages, reflecting stable demand trends and ongoing dry conditions throughout many U S corn growing regions.
We expect corn prices to remain at levels that would support strong fertilizer demand for the balance of 2023 and into 2024.
We believe that lower farm input costs over the next several months and the goal of maximizing yields should incentivize farmers to optimize fertilizer application in the fourth quarter of 2023 and in the first half of 'twenty 'twenty four.
Demand for our industrial business remained steady supported by the resilient U S economy.
Nitric acid demand is stable as some global producers continue to shift production from international facilities to the U S operations to capitalize on lower U S input costs.
Demand from known ammonium nitrate and mining applications as strong as the expansion of the infrastructure projects increases the demand for coring and aggregate production and the growth in electric vehicles and other applications is raising the demand for metals in the U S.
Now I'll turn the call over to Cheryl to discuss our second quarter results and our outlook Cheryl.
Thanks, Mark and good morning on page six you'll see a summary of our third quarter financial results. We generated adjusted EBITDA of 9 million in the third quarter as Mark mentioned, our results were impacted by lower than expected nitric acid production.
Although sales volumes of nitric acid and derivative products were somewhat lower we were able to meet the majority of our customer commitments by purchasing nitric acid or transporting product from our other facilities.
Constant purchasing and transporting nitric acid as compared to upgrading from ammonia combined with higher maintenance and other costs reduced our third quarter EBITDA by approximately 6 million.
Page seven bridges, our 9 million of it third quarter adjusted EBITDA to a record 50 million EBITDA for the third quarter of 2022.
The impact of weaker selling prices for our products relative to last year is the major factor in the year over year change in EBITDA.
Page eight provides a summary of our key balance sheet and cash flow metrics, we generated cash flow from operations of approximately 17 million and had capital expenditures of approximately 9 million translating into more than 8 million free cash flow.
Despite the pricing headwinds year to date, we generated approximately 120 million in cash flow from operations was 41 million in capital expenditures translating into nearly $80 million of free cash flow and our free cash flow conversion rate of over 70%.
We expect capital expenditures for the fourth quarter to be approximately 15 to 20 million with Capex for the full year of approximately 60 million.
Looking forward to the fourth quarter nitrogen prices are firming up Tampa ammonia currently sits at $625 per metric ton.
That's strongly from the low of $285 per metric ton in July.
This pricing recovery has been due in part to lower inventories throughout the global nitrogen distribution channel relative to several months ago, along with recent production outages at some large international ammonia plants.
No. The UAE and is currently $260 per ton up from approximately 190 per ton in July.
While we are glad to see pricing rebound keep in mind that our realized pricing in the fourth quarter will largely reflect prices for products sold forward during Q3.
In addition to some products so that spot pricing.
As a result fourth quarter pricing is expected to be approximately 60% to 70% lower than a year ago how.
However, the recent rebound in pricing sets us up well for 2024.
As Mark mentioned, one of our nitric acid plants at our Pryor facility will not be back in service until the end of November.
As a result, we intend to meet customer commitments with product transport it from our other facilities and that additional cost is expected to be a headwind on EBITDA of approximately 3 million in the fourth quarter.
Lastly, as a reminder, we are approximately 90% locked in on gas costs for the fourth quarter at approximately $4 per M. M. B T U.
And now I'll turn it back over to Mark.
Thank you Cheryl.
Page nine shows the downward trend in European and Asian natural gas prices that began in late 2022, resulting from a warm winter and heavy LNG imports.
The drop in gas prices enabled European ammonia producers to restart idled plants in the first half of 2023, which increased the global nitrogen supply.
Over the past three months European gas prices have reversed course and increased significantly from summer low levels widening the spread against U S gas prices we.
We believe this disconnect could represent a possible source of ammonia price support heading into the winter months.
On page 10, you'll find a summary of the recently announced Houston ship channel Blue ammonia project.
We're currently in the pre feed phase of developing a world scale ammonia plant that is expected to produce approximately $1 1 million metric tons of ammonia, while capturing and permanently sequestering approximately 1.6 million metric tons of C O two.
The plant is planned for construction on vote back motives Houston ship channel ammonia terminal.
The terminal site is equipped with storage and handling infrastructure in multiple deepwater berths.
Now, let's be in partnership with impacts Japan's largest E&P company plans to build and operate an ammonia loop using low carbon hydrogen produced by air Lockheed who will also be handling the carbon capture and sequestration.
Additionally, <unk> will be supplying our nitrogen needs.
We selected the supplier of the technology license basic engineering design proprietary equipment and catalyst and we were in negotiations to finalize the related agreements.
In addition to engineering and design activities we.
We're working to secure offtake customers for the anticipated ammonia production we.
We expect the initial off takers to be Japanese and South Korean power companies.
We're very excited both in the caliber of the companies, we are partnering with and the potential to transform L. S be into one of the only predominantly low carbon ammonia producers in our industry.
Page 11 provides an overview of our Rosa other low carbon initiatives.
We continue to be encouraged by our conversations with the E. P. A about our class six permit application for the carbon capture and sequestration project at our El Dorado site.
We remain comfortable with the timeline that calls for us to commence production of blue ammonia in the second half of 2025, and we are in discussions with customers about their interest in buying low carbon products.
With respect to our green ammonia projects in our prior site given the uncertainty around the 45 the tax credits combined with the projects current capital cost. This project is currently on hold.
We remain excited about this project and our opportunity to be an early entrant in the into the production of green ammonia and.
And we continue to have discussions with potential off takers for green ammonia supply.
But we need clarity and Finalization of the 45 tax credits before we can make a decision to move forward.
The U S has the lowest cost natural gas gas globally.
This drives a considerable amount of its electricity generation capacity.
However, U S electricity prices have increased relative to natural gas prices, which works in favor of natural gas and products produced from it compared to alternatives.
That is a considerable headwind for the build out of industry based on sourcing power from the grid, which includes green ammonia production.
This development is also why we believe the path to blue ammonia is much easier than the past the green ammonia today.
Especially considering the lack of grant of a green premium favoring production economics.
Therefore, our current focus is on making sure we execute effectively on our El Dorado Blue ammonia project and our Houston ship channel Blue ammonia project as they both set us up well for the future.
Despite facing the pricing challenges of 2023, we've made significant progress on several fronts that we expect to drive bottom line growth and shareholder value. We continue to join it generate positive free cash flow, enabling us to maintain a strong balance sheet. We continue to make progress in advancing a number of core growth projects that I discussed earlier.
And we expect to have greater clarity on these in the first quarter of 'twenty 'twenty four.
And we expanded our portfolio of low carbon ammonia projects positioning us to be a meaningful contributor to the energy transition IMAX.
I'm excited by the advancements that we're making and about our future.
Before we open it up for questions I'd like to mention that we will be participating in the granite Research management Conference series on November 14th.
And then the New York Stock Exchange Industrial day on November 15th.
Forward to speaking with many of you at those events.
That concludes our prepared remarks, and we will now be happy to take any questions. Thank you.
At this time, we'll be conducting a question and answer session.
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One moment. Please we poll for questions. Thank you.
Thank you and our first question is from the line of Josh Spector with UBS. Please proceed with your questions.
Hi, Good morning, everyone, It's Chris Perrella on for Josh.
I was as I look at the Houston ship channel projects could you give some more granularity on what the potential cost would be for you as you work out those projects and what the value capture would be.
Yeah sure good morning, so right now.
Based on our feasibility study and we think that the cost of the project is somewhere between $500 million and $750 million for the loop.
So.
The way we're structuring this project and we intend to structure it is really.
To buy hydrogen based on natural.
Natural gas and maybe electricity Oh, it's indexed to that the pricing of that and then to sell to our end customer with the same index civil back to back debt.
So based on that and the ability we believe the ability to have firm contracts take or pay contracts.
We will project finance debt.
So generally speaking you know project Financers nonrecourse debt.
Probably be able to get in the in the range of 60% to 70% of project financing debt, but if we're conservative and say, 60% and we use the $750 million that would be $450 million of project financing debt, leaving about $300 million of.
The equity or cash that needs to go into that.
For simplicity purposes, we haven't worked out the ownership structure quite yet, but assume that L. S being impacts as 50 50.
Ownership of the loop that would be $150 million of cash from L. S. B over it you know.
Three year period.
Alright, so 150 over a three year conservatively, depending on you know what the final and the ownership structure of the loop.
Correct and from a what do we get out of its standpoint, it's 1.2 metric tons of production and if we don't have that would be 600000 tonnes for us of blue ammonia production on an annual basis.
Alright, and you would try to structure that as a take or pay.
And then our cost structures index, so that would all kind of be index farooq.
Yeah. So we would only move forward, if we had take or pay contracts and.
Our thoughts now are we should be able to again derisked.
The volatility within the project by indexing, both our hydrogen supply and our ammonia offtake with the same based on the same indexes.
Alright.
One.
I'm sorry.
I was just going to say so in essence, what we're really doing is creating.
Our stable, we intent to create a stable stream of cash flow almost like an annuity and then the risk really for US is just the operation of a brand new plant.
Alright that makes sense and then.
A follow up question with the Mississippi River at Lowe's and I know this is the season, where we were trying to move ammonia around and I know not necessarily direct impacts, but have you seen impact or you know what is the market.
Now, implying or seeing the impact of the lower water levels on the Mississippi as we gear up for the fall application season.
I think anyone who's going to use the Mississippi or the law.
Lower Mississippi in particular as a method of transportation is going to have some issues.
Generally speaking, we're almost half the normalized levels.
Of our vessels moving around so.
That becomes a real issue for people that that need to barge ammonia.
Alright, and then I guess has that impacted you know the spot market and your your spot sales in the fourth quarter here.
Or is that a is that kind of more set up for 2020 for impact.
Yeah, we don't we don't tend to barge ammonia at all so were not really impacted and quite frankly.
If it became a real issue and ammonia couldnt move from the south up to the corn belt are those who have ammonia capacity available for sale.
Would benefit by it because it should then incur.
Increased spot pricing.
Alright, and then just one.
One final question how much of the volume is locked in or was pre sold into the fourth quarter.
Oh, well, we don't generally give out a percentage, but suffice it to say that you know a good portion of our fourth quarter sales are pre sold.
Alright. Thank you very much I appreciate the time this morning.
Great to talk to you.
Our next question is from the liner Andrew Wong with RBC capital markets. Please proceed with your question.
Hey, good morning, It's Harrison run outs on for Andrew Wong I was just wondering if you could provide some thoughts on the hedging position and maybe any comments on the strategy for next year.
Yeah, So going I think we've talked about this on a couple of earlier calls but.
Late last year, we were able to we have the ability to lock in gas at certainly less than $4 and I'd say between three and $4 for the full year of 2023 and.
Given where gas prices were and where people are at least the futures, where we thought that was prudent.
Clearly it turned out to be not prudent as gas dropped down to.
Almost $2 an M P to you.
So we have as Sheryl said gas hedged about 90% for the fourth quarter at around $4. So we're still suffering with that hedged for the fourth quarter going forward.
You will not see us hedge at all we will.
I first of the month gas for most of our gas leaving a.
A little bit as daily gas due to just fluctuations within the plant.
But we will basically be spot on first of the month starting in January.
Great. Thanks, so much.
Sure.
Our next question is from the line of Laurence Alexander with Jefferies. Please proceed with your questions.
Good morning, two questions. One is on the off take agreement actually three questions. One is on the offtake agreement can you just characterize.
Characterize when you think you may reasonably have off take agreements for the blue ammonia in place.
And secondly.
Can you give an up a little bit more detail on how youre thinking about the mitra passenger trends into yearend or possibly into early next year.
And then just lastly on the marine fuel can you just given up please on your thinking about what needs to fall into place.
For that to become material and when do you think you'll start to see sort of a significant chunk of end market demand for marine fuel applications.
Sure.
Hopefully I remember the questions [laughter], so on an offtake for the new ammonia plant.
Right now our schedule is.
We're currently in discussions with.
Many off takers as are a lot of our competitors, who are looking to build facilities as well.
Right now we've entered pre feed.
So that will.
Last until the second quarter of 2024.
And then we'll certainly.
Evaluate where we are from a cost perspective.
And then hopefully move into feed which will take one year. So.
So we'll see.
Finished in the second quarter of 2025 within the time of us.
Executing on our feed study, we would expect that we would have negotiated.
Or pay contracts with Japanese.
Japanese and Korean and potentially European and U S off takers.
For the ammonia that we would produce at.
At the end of feed we would have to make a decision on.
Whether we're moving forward so if I D and we would not move forward without take or pay contracts.
Yeah.
As far as.
I'm sure I'm I'm, sorry, I'm sorry.
Oh, yeah as far as nitric acid I mean, we've got really healthy markets here is as we mentioned earlier.
Earlier, and we see the demand continuing to be a pretty strong nitric acid.
Sales we've been in that market for you know the last 30 plus years.
And then I would say nitric acid, obviously is upgraded to other products.
On the non non fertilizer side would be ammonium nitrate, both solution and prill today, and we're seeing really strong trends there as well. So we hope that we believe that will continue.
And then just lastly on the marine fuel.
Yeah, I mean, that's a really great great question I know that there is.
And a significant activity in developing a new ammonia powered engines and whether that's.
100 per cent ammonia or partial ammonia as a fuel source.
You know that's expected on the number of engine manufacturers are working on that and they're testing and they talk about how there's going to be a you know actual engine to purchase or vessel the purchase with that engine.
In 2025, whether that happens or not I don't know that we're close enough to it but the other thing I'd say is.
There's a there's going to be an additional cost.
To using either blue ammonia or green ammonia.
On Green ammonia as I mentioned earlier I don't think we're seeing yet people willing to pay a premium and so that actually is I think is going to put a cap on that.
There are niche applications much smaller applications that are less price sensitive that I think will be focused on zero carbon.
But by and large the large volumes of green ammonia that we're talking about whether it's for power generation or the marine fuel.
Oh, the marine industry.
I think we're going to need to see them be willing to pay a premium before.
There's a lot of big off take contracts for that so moving over to blue ammonia.
<unk>.
Look I think that it'll depend on how stringent.
Some of the regulations are on a really forcing ship owners to reduce their C. O two emissions, but there'll be a cost to that and so I think.
That's really yet to play out.
Okay. Thank you.
Our next question is from the line of Charles <unk> with Piper Sandler. Please proceed with your question.
Morning.
One question on on the ammonia pricing, obviously pricing today is a lot higher than what you guys had sold into <unk> into <unk>. So I'm assuming there's.
Like you said, there's not much of an impact.
<unk> and ammonia price, but when you get into <unk> would you be able to basically you haven't sold anything probably back so assuming price flat, we should see a fairly significant increase in ammonia price for you guys in <unk>.
Yeah, Charlie that would be the expectation I agree.
Okay, and then in terms of the the carbon capture Gale, let's assume everything goes forward its online lines as opposed to I know, it's sort of I want I'm not sure what to call. It a sharing arrangement whatever are they paying on a part time basis or is there a flat fee that you guys are gonna be getting each year under the assumption that the El Dorado.
The plant is running at some some operating level will.
Will it vary at all or is it just going to be some for lack of a better term a locked in number every year going forward.
Yes, so there's a minimum amount of C. O two that we have to sell them per year.
But there is no ceiling on that so the better that we can run that plant.
The higher the fee that we would get since it's on a per ton basis. Okay.
And then I guess looking at that is there anything in the contract, let's say they think that it goes swimmingly well. These subsidies continue as they are.
Buyout, where you can basically buying the equipment pay them out and become the that's the the player yourself instead of just the share.
Yeah.
Yeah.
There is the ability to negotiate something but no. There is no price for a buyout.
And my last question is.
As of now.
Forgetting whether you can get the product up and down the Mississippi water conditions look like for fall ammonia application now we're getting well we just started to see some cold weather is starting to come in.
When do you guys expect ammonia application or.
Or is there a snow already and that's becoming a problem.
No I think we're gonna have a good fall ammonia run.
I think you know, we're just starting to hear rumblings of it I wouldn't suggest that it's taken off for a really started.
So I think the weather I mean weather around the country looks like we had a cold spell, but now were warming up again and here in Oklahoma City I know, we've warmed up significantly.
So we still expect a lot of tons to move and you know where.
And are anxiously awaiting that.
I assume that the you know.
Yeah.
Perfect preferences by end of year or into early once once the applications offerings tanks are empty and you can start reselling for them for the spring.
And that's the objective at this point.
Yes.
Okay. Thanks very much.
Thanks Julie.
Thank you.
The next question is from the line of Robert Maguire with Garnet Research. Please proceed with your questions.
Good morning, Mark.
Thank you.
UAW strike had an impact on your nitric acid volumes and if so can you kind of give us an idea if that's going to continue into the fourth quarter.
Yes.
We haven't seen any.
Any impact of nitric acid volumes in.
You know some of the UAW.
Strikes have been settled.
So they've been somewhat short lived so I don't see that as being an issue.
Great and then shifting over.
Green ammonia off take agreements.
Do you think there's a lot of projects out there both in the U S and around the world.
Do you anticipate a number of those other projects being put on hold as well just due to lack of off take agreements.
In other words do you think there is a bigger shift towards blue ammonia versus green ammonia.
In terms of worldwide demand.
Going forward for low carbon in pneumonia.
Yeah. So.
We do.
The U S government has put out.
Really good incentives in their eye or a but.
And unfortunately, what they haven't done as they haven't given details [laughter].
So.
If your.
Facing a project today on.
Receiving the full $3 per kilogram hydrogen credit forty-five V credit.
I know, we're concerned because they've now kick the can down the road several.
Times and now I hear possibly in January but really early in 2024 is when they'll finalize that I think the problem is you just don't know.
What you really need to do to qualify to get that and so I think it makes moving forward on projects really difficult until the there's a lot of clarity there alright, and thats really clear.
On the blue ammonia side of Blue hydrogen.
I think it's while it has not been finalized it's clearly.
A lot clearer because.
Tax credits for carbon capture have been in place for many years just at lower levels. So at least there is some framework there and understanding of it.
So I can't comment on other People's projects, and what Theyre thinking.
I would note and I think I said this earlier, but if we can't get take or pay offtake.
And we won't move forward on a project, but we believe that we can.
So we're encouraged based on our.
Ours, and our partner impacts as conversations with potential off takers that we will have a really good opportunity to secure take or pay contracts.
Thank you and then.
Shifting topics again would you briefly bring us up to date on the margin enhancement projects that you're working on you discussed them.
The analyst meeting earlier this year, just if you can give us an idea of what they are and just kind of estimate of when they will be producing and then.
The aggregate amount if you'd asked them altogether of the type of EBITDA that could generate.
Sure.
Joe you want to go through that yes, that's no problem.
Hey, Rob So we have the urea expansion project at Pryor.
To upgrade ammonia to an additional 75000 tons of UN we expect that to go into full operation during the third that turnaround at Pryor next year.
So that's one of the key projects from our margin enhancement perspective. So that's clearly as you know the upgrade that margin from them.
Ammonia to you Ann which is impactful.
We also have additional nitric acid storage that we're putting in at El Dorado.
Also planned for the first half of next year.
So that's an additional 5000 tons of storage it allows us to keep those asset plants running at full rate all the time and allows us to you know.
Maximize upgraded product at El Dorado, So that's another important one.
We're also working on a coating agent for our <unk> product. It helps us durability is H H Stan doesn't always store while in the heat in the summer months.
So help with potential export opportunities that we may have on that product.
Also you know on track for the first quarter, our second quarter I guess a 2024.
Those are the three that are the furthest along at this point.
Probably $7 million to $10 million of annual EBITDA from a run rate perspective, and then we've got some more project and are in the pipeline, but nothing to speak of publicly at this point.
Thanks, Sheryl I appreciate that update and just one last question on the new Star pipeline turnaround that took place during the quarter can you kind of give us an idea of what that cost in terms of tonnage.
For LSP in Alt.
So maybe you can give us an idea relative to what that tonnage was last year when they did their turnaround.
So you know for the most part I think I would say, we were able to make up a lot of the tons in the back half of the quarter I think the Neustar pipeline came up a little bit earlier than planned.
You know so I don't think Rob that there was a material impact to the third quarter for the ammonia times, if you look at our volumes.
We think there's quite a bit of volume in the third quarter.
Thank you so much.
<unk>.
Thanks, Rob.
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Our next question comes from the line of David Begleiter with Deutsche Bank. Please proceed with your questions.
Thank you. Good morning. This is Anthony American Daddy unfair on for David.
Good morning on farm on farm incomes have had falling corn prices have come down quite a bit this year curious to get your thoughts on how you view the operating environment with potentially lower commodity prices and perhaps lower yields do you still see strong AG fundamentals.
Going forward you into 2024.
Yeah, So you're right corn prices have come down from the highs of where the recent highs of $7, a bushel and we're seating and had been trending right around $5, but still really healthy price for corn and a good price for farmers.
And incentive for them to really plant.
A maximum amount of corn.
So we're I think we're at we're at a point now where if we stay at those levels and given some of the lower commodity prices as you mentioned, which are input cost for them.
They're still making realm.
Relatively good income.
So I don't think we'll see an impact that's certainly not a downward trend and I would say think.
That we're going to see strong planting so far so which would translate into stronger fall ammonia application and then we're expecting a really good spring.
Got it.
And then yeah, just on that last point, there I mean, 2023 it's a bit of a challenging year and I know it's early but.
Just curious if you can take us through maybe some of the puts and takes that you've alluded to earlier on how you're viewing 'twenty four from from where we stand today I'm just trying to get a feel for how you view the demand environment early on in this in this ammonia application season.
What that could potentially mean for this planting season in the spring.
Yeah. So I think we're going to we're going to see.
Healthy demand for fertilizer across the board.
And if you look at.
2024 as a whole.
I think we're expecting that average fertilizer prices and certainly average nitrogen fertilizer prices.
In 2024 will be higher than they were in 2023.
Very helpful. Thank you.
Sure.
Thank you at this time, we've reached end of our question and answer session I will hand, the floor back to management for closing remarks.
Well I want to thank you for participating in our earnings call and for your interest in LSP industries, and if you have any other questions. Please feel free to follow up with either Fred shareholder myself. Thanks, so much.
This will conclude today's conference you may disconnect your lines at this time and thank you for your participation.