Methanex (MX) Q3 2024 earnings summary

Executive summary

• Q3 2024 net income attributable to shareholders was $31 million, with adjusted EBITDA of $216 million and adjusted net income of $82 million ($1.21 per share), both up from Q2 2024 due to higher prices, G3 ramp-up, gas sales in New Zealand, and an insurance recovery in Egypt.

• Announced a $2.05 billion agreement to acquire OCI Global's international methanol business, including two Beaumont, Texas facilities; closing expected in H1 2025.

• G3 plant completed performance and reliability tests, producing 154,000 tons in 30 days and now running at 1.8 million tons/year.

• New Zealand operations idled one Motunui plant due to gas constraints, resulting in a $90 million after-tax non-cash impairment; cost optimizations and workforce reduction of 70 employees expected to offset EBITDA and cash flow impact.

• Significant gas supply contracts were secured in Chile and Argentina, supporting increased production in coming years.

Financial highlights

• Revenue was $935 million in Q3 2024, up from $920 million in Q2 2024; adjusted EBITDA was $216 million, higher than Q2, driven by improved pricing and one-time items.

• Adjusted net income was $82 million ($1.21/share), up from $42 million ($0.62/share) in Q2 2024.

• Ended Q3 with $511 million in cash and access to a $500 million undrawn revolving credit facility.

• On track to repay $300 million bond due December 1, 2024.

• Cash flows from operating activities were $210 million, compared to $106 million in Q3 2023.

Outlook and guidance

• Q4 2024 production guidance is approximately 1.9 million tons, with similar adjusted EBITDA expected as Q3 and higher realized prices between $365 and $375/ton.

• New Zealand will operate one plant at full rates, with annual capacity of 800,000–850,000 tons; 2024 output expected at ~600,000 tons.

• Chile’s 2025 production could reach 1.3–1.4 million tons, depending on winter gas supply; gas contracts extended to 2030 (ENAP) and 2027 (YPF).

• Focus remains on deleveraging and integrating OCI's methanol business post-acquisition, targeting $550–$600 million debt repayment over 18 months.

• Q4 Adjusted EBITDA expected to be similar to Q3, with higher sales and prices offset by lower NZ gas sales and no Egypt insurance recovery.