17:51:46 EDT Thu 28 Mar 2024
Enter Symbol
or Name
USA
CA



Methanex Corp
Symbol MX
Shares Issued 73,124,527
Close 2022-04-27 C$ 62.76
Market Cap C$ 4,589,295,315
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Methanex earns $119-million (U.S.) in Q1

2022-04-27 17:46 ET - News Release

Mr. John Floren reports

METHANEX REPORTS EXCELLENT FIRST QUARTER 2022 RESULTS

For the first quarter of 2022, Methanex Corp. reported a net income attributable to Methanex shareholders of $119-million ($1.60 net income per common share on a diluted basis), compared with a net income of $201-million ($2.51 net income per common share on a diluted basis) in the fourth quarter of 2021. The decrease in net income is primarily due to the change in the mark-to-market impact of share-based compensation and the effective tax rate, which was lower in the fourth quarter of 2021, due to a reduced tax rate in Chile and the resolution of outstanding tax matters not recurring in the first quarter of 2022. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for the first quarter of 2022 was $337-million and adjusted net income was $159-million ($2.16 adjusted net income per common share). These figures compare with adjusted EBITDA of $340-million and adjusted net income of $185-million ($2.43 adjusted net income per common share) for the fourth quarter of 2021. Except where otherwise noted, all currency amounts are stated in U.S. dollars.

The methanol market was tight entering the first quarter of 2022 and supply continued to be constrained by low industry operating rates. The conflict between Russia and the Ukraine further increased global energy prices, providing support for the methanol cost curve. The average realized price in the first quarter was $425 per tonne, compared with $445 per tonne in the fourth quarter of 2021.

Methanex generated strong cash flows, ending the quarter with $1.1-billion in cash, and returned $101-million to shareholders through the regular dividend and share repurchases. The continued strength of the balance sheet, combined with solid methanol market fundamentals, has allowed the company to increase distributions to shareholders going forward through the increases to the dividend and normal course issuer bid.

John Floren, president and chief executive officer of Methanex, said: "I am pleased to see strong industry conditions continue through the first quarter and into the second quarter. Our continued strong financial performance allows us to continue our long track record of returning excess cash to shareholders through our increased dividend and upsized share buyback program. The G3 project is progressing well, and, as a fellow shareholder, I am excited about its cash flow generation capability and its world-class CO2 intensity profile."

Further information

The information set forth in this news release summarizes Methanex's key financial and operational data for the first quarter of 2022. It is not a complete source of information for readers and is not in any way a substitute for reading the first quarter 2022 management's discussion and analysis (MD&A) dated April 27, 2022, and the unaudited condensed consolidated interim financial statements for the period ended March 31, 2022, both of which are available from the investor relations section of the company's website. The MD&A and the unaudited condensed consolidated interim financial statements for the period ended March 31, 2022, are also available on SEDAR and on EDGAR.

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 shown in the attached table.

Financial highlights include the following:

  • The company recorded net income attributable to Methanex shareholders of $119-million in the first quarter of 2022, compared with net income of $201-million in the fourth quarter of 2021. The decrease in net income is primarily due to the change in the mark-to-market impact of share-based compensation and the effective tax rate, which was lower in the fourth quarter of 2021, due to a reduced tax rate in Chile and the resolution of outstanding tax matters not recurring in the first quarter of 2022.
  • The company recorded adjusted EBITDA of $337-million for the first quarter of 2022, compared with $340-million for the fourth quarter of 2021. It recorded adjusted net income of $159-million for the first quarter of 2022, compared with adjusted net income of $185-million for the fourth quarter of 2021. Adjusted EBITDA for the first quarter of 2022 is comparable with the fourth quarter of 2021 as the modest decrease in the company's average realized methanol price to $425 per tonne from $445 per tonne was primarily offset by lower costs due to a higher proportion of Methanex-produced methanol sales and the methanol price impact on the company's methanol-linked gas costs. Adjusted net income for the first quarter of 2022 is lower compared with the fourth quarter of 2021, as the effective tax rate was lower in the fourth quarter of 2021, due to reduced tax rate in Chile and resolution of outstanding tax matters not recurring in the first quarter of 2022.
  • The company sold 2,758,000 tonnes in the first quarter of 2022, compared with 2,804,000 tonnes for the fourth quarter of 2021. Sales of Methanex-produced methanol were 1,797,000 tonnes in the first quarter of 2022, compared with 1,672,000 tonnes in the fourth quarter of 2021.
  • Production for the first quarter of 2022 was 1,789,000 tonnes, compared with 1,933,000 tonnes for the fourth quarter of 2021. Production is lower for the first quarter of 2022, primarily due to unplanned and planned outages at the company's Geismar, Egypt and Atlas facilities.
  • Construction on the company's highly advantaged Geismar 3 project continues on plan and is well positioned to be completed on time and on budget by the end of 2023 or early 2024. The company's capital cost estimate for the project is $1.25-billion to $1.35-billion, and the company has spent $620-million to the end of March 31, 2022 (all amounts before capitalized interest). Geismar 3's world-class carbon dioxide (CO2) intensity profile will enhance the company's current asset portfolio and help the company meet its recently published commitment to reduce its greenhouse gas emissions intensity.
  • In the third quarter of 2021, the company commenced a normal course issuer bid to repurchase up to 3,810,464 common shares. To March 31, 2022, it has repurchased 3,304,540 common shares for $155-million. On April 27, 2022, the board approved an increase to the normal course issuer bid for an incremental 2,283,707 shares, for a total of 6,094,171 shares, increasing the normal course issuer bid to 10 per cent of the company's public float.
  • In the first quarter of 2022, the company paid a 12.5-cent-per-common-share quarterly dividend to shareholders for a total of $9-million. On April 27, 2022, it announced a 16-per-cent increase in its quarterly dividend to 14.5 cents per common share. The increased dividend will apply to the dividend payable on June 30, 2022.
  • At March 31, 2022, the company has a strong liquidity position, including a cash balance of $1.1-billion and $600-million of undrawn backup liquidity.

Key production and operational highlights during the first quarter and production outlook for 2022 include the following:

  • New Zealand produced 386,000 tonnes, compared with 405,000 tonnes in the fourth quarter of 2021. In New Zealand, the company's production was lower in the first quarter of 2022, compared with the fourth quarter of 2021, due to lower gas deliveries. Based on the company's outlook for natural gas in New Zealand, Methanex estimates production for 2022 to be approximately 1.5-million tonnes.
  • Geismar produced 556,000 tonnes in the first quarter of 2022, compared with 605,000 tonnes in the fourth quarter of 2021. Geismar production was lower for the first quarter of 2022, compared with the fourth quarter of 2021, as production was impacted by minor unplanned outages at both Geismar 1 and 2 during the first quarter.
  • Atlas produced 258,000 tonnes (Methanex interest) in the first quarter of 2022, compared with 296,000 tonnes in the fourth quarter of 2021. Production in Trinidad was lower in the first quarter of 2022, compared with the fourth quarter of 2021, due to a minor unplanned outage at the company's Atlas plant. Titan remains idled indefinitely.
  • Chile produced 324,000 tonnes in the first quarter of 2022, compared with 334,000 tonnes in the fourth quarter of 2021. Production for the first quarter of 2022 is comparable with the fourth quarter of 2021, as the company's Chile IV plant ran continuously through both quarters, as both periods fall within the Southern Hemisphere summer months, when domestic natural gas demand is lower. The company expects to have sufficient gas to operate both Chile plants to the end of April, 2022, following which Methanex anticipates operating one plant through the Southern Hemisphere winter. Methanex estimates Chile production in 2022 to be approximately one million tonnes.
  • Egypt produced 208,000 tonnes (Methanex interest -- 104,000 tonnes) in the first quarter of 2022, compared with 288,000 tonnes (Methanex interest -- 144,000 tonnes) in the fourth quarter of 2021. Production in Egypt was lower in the first quarter of 2022, compared with the fourth quarter of 2021, due to a planned 20-day outage in the first quarter.
  • Medicine Hat produced 161,000 tonnes in the first quarter of 2022, compared with 149,000 tonnes in the fourth quarter of 2021. Production for the first quarter of 2022 is slightly higher compared with the fourth quarter of 2021, as the plant did not experience any of the weather related constraints faced in the fourth quarter of 2021.

Conference call

A conference call is scheduled for April 28, 2022, at 11 a.m. ET (8 a.m. PT), to review these first quarter results. To access the call, dial the conferencing operator 15 minutes prior to the start of the call at 416-340-2217 or toll-free at 800-806-5484. The passcode for the call is 2971996 followed by the pound key. A simultaneous audio-only webcast of the conference call can be accessed from the company's website and will also be available following the call.

About Methanex Corp.

Methanex is a Vancouver-based, publicly traded company and is the world's largest producer and supplier of methanol to major international markets. Methanex shares are listed for trading on the Toronto Stock Exchange in Canada under the trading symbol MX and on the Nasdaq Global Market in the United States under the trading symbol MEOH.

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