Methanex (MX) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw an average realized price of $352/ton, with produced sales of 1.6 million tons, generating adjusted EBITDA of $164 million and adjusted net income of $0.62 per share, up from Q1 due to higher prices.

• Net income attributable to shareholders was $35 million in Q2 2024, down from $53 million in Q1, mainly due to lower produced methanol sales and negative mark-to-market share-based compensation, partially offset by higher realized prices.

• G3 plant repair was completed, with first methanol production achieved in late July and ramp-up to full rates expected in the coming weeks, anticipated to enhance cash flow and have a low emissions profile.

• Methanol markets tightened in early Q2, with global demand outpacing supply, leading to inventory drawdowns and price increases.

• Returned $12.5 million to shareholders via dividends; ended Q2 with $426 million in cash and an undrawn $500 million credit facility.

Financial highlights

• Revenue was $920 million in Q2 2024, nearly flat sequentially and down from $939 million in Q2 2023.

• Adjusted EBITDA for Q2 was $164 million, including $13 million in G3 delay costs; excluding these, adjusted EBITDA would have been $177 million.

• Adjusted net income was $42 million ($0.62 per share), compared to $44 million ($0.65) in Q1 2024 and $41 million ($0.60) in Q2 2023.

• Cash flows from operating activities were $163 million, down from $196 million in Q2 2023, mainly due to working capital changes.

• Ended Q2 with $426 million in cash ($390 million net of non-controlling interests and including Atlas JV share).

Outlook and guidance

• Full-year produced volume guidance reaffirmed at 7 million tons, supported by G3 ramp-up, with actual output subject to gas availability and unplanned events.

• Q3 adjusted EBITDA and earnings expected to be lower than Q2 due to reduced sales from Chile and New Zealand and G3's initial inventory build.

• Q4 sales and earnings anticipated to reflect full G3 production run rate.

• Chile 2024 production expected slightly above the high end of 1.1–1.2 million ton guidance; New Zealand below previous 1.0–1.1 million ton guidance.

• Egypt plant operating at reduced rates due to gas curtailments, with limitations expected through Q3.