MEOH - Methanex Reports Third Quarter 2023 Results | Benzinga
Except where otherwise noted, all currency amounts are stated in United States dollars.
- Net income attributable to Methanex shareholders of $24 million and Adjusted EBITDA of $105 million in the third quarter. The average realized price in the third quarter was $303 per tonne compared to $338 per tonne in the second quarter of 2023.
- Geismar 3 ("G3") project is progressing safely to plan and construction is near completion with commercial production expected around the end of 2023. The remaining cash spend of $140 - 190 million is fully funded with cash on hand.
- Chile I restarted in September with increased gas availability from Argentina. We are increasing our 2023 production guidance for Chile from 0.8-0.9 million tonnes to 0.9-1.0 million tonnes.
- Signed a two-year natural gas supply agreement with the National Gas Company of Trinidad and Tobago (NGC) for the Titan methanol plant (875,000 tonnes per year capacity), which is currently idled, to restart operations in September 2024. Simultaneously, the Atlas plant (Methanex interest 63.1% or 1,085,000 tonnes per year capacity) will be idled in September 2024, when its legacy 20-year natural gas supply agreement expires.
- Returned $12 million to shareholders through regular dividends and ended the third quarter with $529 million in cash.
VANCOUVER, British Columbia, Oct. 25, 2023 (GLOBE NEWSWIRE) -- For the third quarter of 2023, Methanex (TSX:MX) (NASDAQ:MEOH) reported net income attributable to Methanex shareholders of $24 million ($0.36 net income per common share on a diluted basis) compared to net income of $57 million ($0.73 net income per common share on a diluted basis) in the second quarter of 2023. Net income in the third quarter of 2023 was lower compared to the prior quarter primarily due to a lower average realized price, lower sales of Methanex-produced methanol and the mark-to-market impact of share-based compensation due to changes in Methanex's share price, offset by a settlement of a historical dispute under an existing gas contract. Adjusted EBITDA for the third quarter of 2023 was $105 million and Adjusted net income was $1 million ($0.02 Adjusted net income per common share). This compares with Adjusted EBITDA of $160 million and Adjusted net income of $41 million ($0.60 Adjusted net income per common share) for the second quarter of 2023.
Our average realized price in the third quarter was $303 per tonne compared to $338 per tonne in the second quarter of 2023. Through the third quarter we saw improving global market conditions with stronger demand as well as moderation in global operating rates mainly from various supply outages in North America, the Middle East and Southeast Asia.
During the quarter, we returned $12 million to shareholders through the regular dividend. We ended the quarter with $529 million in cash, or approximately $510 million in cash excluding non-controlling interests and including our share of cash in the Atlas joint venture. We also have an undrawn $300 million revolving credit facility that provides additional financial flexibility.
Rich Sumner, President & CEO of Methanex, said, "We continue to proactively navigate the uncertain macro environment while remaining focused on delivering G3 safely and maintaining strong operational results. We are confident that with our continued focus on financial flexibility we will be able to execute our strategy and advance our balanced capital allocation priorities to drive long-term value for our shareholders."
FURTHER INFORMATION
The information set forth in this news release summarizes Methanex's key financial and operational data for the third quarter of 2023. It is not a complete source of information for readers and is not in any way a substitute for reading the third quarter 2023 Management's Discussion and Analysis ("MD&A") dated October 25, 2023 and the unaudited condensed consolidated interim financial statements for the period ended September 30, 2023, both of which are available from the Investor Relations section of our website at www.methanex.com. The MD&A and the unaudited condensed consolidated interim financial statements for the period ended September 30, 2023 are also available on the Canadian Securities Administrators' SEDAR website at www.sedar.com and on the United States Securities and Exchange Commission's EDGAR website at www.sec.gov.
FINANCIAL AND OPERATIONAL DATA
| Three Months Ended |
| Nine Months Ended |
| ($ millions except per share amounts and where noted) |
| Sep 30 2023 |
| Jun 30 2023 |
| Sep 30 2022 |
| Sep 30 2023 |
| Sep 30 2022 |
| Production (thousands of tonnes) (attributable to Methanex shareholders)1 |
| 1,545 |
| 1,658 |
| 1,252 |
| 4,863 |
| 4,592 |
| Sales volume (thousands of tonnes) |
| Methanex-produced methanol |
| 1,473 |
| 1,621 |
| 1,350 |
| 4,743 |
| 4,781 |
| Purchased methanol |
| 905 |
| 884 |
| 1,113 |
| 2,637 |
| 2,593 |
| Commission sales |
| 342 |
| 277 |
| 214 |
| 927 |
| 753 |
| Total sales volume1 |
| 2,720 |
| 2,782 |
| 2,677 |
| 8,307 |
| 8,127 |
| Methanex average non-discounted posted price ($ per tonne)2 |
| 395 |
| 450 |
| 480 |
| 439 |
| 518 |
| Average realized price ($ per tonne)3 |
| 303 |
| 338 |
| 377 |
| 337 |
| 408 |
| Revenue |
| 823 |
| 939 |
| 1,012 |
| 2,801 |
| 3,325 |
| Net income (attributable to Methanex shareholders) |
| 24 |
| 57 |
| 69 |
| 141 |
| 313 |
| Adjusted net income4 |
| 1 |
| 41 |
| 49 |
| 118 |
| 292 |
| Adjusted EBITDA4 |
| 105 |
| 160 |
| 192 |
| 474 |
| 772 |
| Cash flows from operating activities |
| 106 |
| 196 |
| 328 |
| 465 |
| 760 |
| Basic net income per common share |
| 0.36 |
| 0.84 |
| 0.99 |
| 2.07 |
| 4.34 |
| Diluted net income per common share |
| 0.36 |
| 0.73 |
| 0.87 |
| 2.07 |
| 4.17 |
| Adjusted net income per common share4 |
| 0.02 |
| 0.60 |
| 0.69 |
| 1.74 |
| 4.04 |
| Common share information (millions of shares) |
| Weighted average number of common shares |
| 67 |
| 68 |
| 70 |
| 68 |
| 72 |
| Diluted weighted average number of common shares |
| 67 |
| 68 |
| 70 |
| 68 |
| 72 |
| Number of common shares outstanding, end of period |
| 67 |
| 67 |
| 70 |
| 67 |
| 70 |
| 1 |
| Methanex-produced methanol represents our equity share of volume produced at our facilities and excludes volume marketed on a commission basis related to the 36.9% of the Atlas facility and 50% of the Egypt facility that we do not own. |
| 2 |
| Methanex average non-discounted posted price represents the average of our non-discounted posted prices in North America, Europe, China and Asia Pacific weighted by sales volume. Current and historical pricing information is available at www.methanex.com. |
| 3 |
| The Company has used Average realized price ("ARP") throughout this document. ARP is calculated as revenue divided by the total sales volume. It is used by management to assess the realized price per unit of methanol sold, and is relevant in a cyclical commodity environment where revenue can fluctuate in response to market prices. |
| 4 |
| Note that Adjusted net income, Adjusted net income per common share, and Adjusted EBITDA are non-GAAP measures and ratios that do not have any standardized meaning prescribed by GAAP and therefore are unlikely to be comparable to similar measures presented by other companies. Refer to the Non-GAAP Measures section on page 14 of our third quarter MD&A dated October 25, 2023 for a description of each non-GAAP measure. |
- A reconciliation from net income attributable to Methanex shareholders to Adjusted EBITDA, Adjusted net income and the calculation of Adjusted net income per common share is as follows:
| Three Months Ended |
| Nine Months Ended |
| ($ millions) |
| Sep 30 2023 |
| Jun 30 2023 |
| Sep 30 2022 |
| Sep 30 2023 |
| Sep 30 2022 |
| Net income attributable to Methanex shareholders |
| $ |
| 24 |
| $ |
| 57 |