VANCOUVER, British Columbia, July 25, 2018 (GLOBE NEWSWIRE) -- For the second quarter of 2018, Methanex (TSX:MX) (NASDAQ:MEOH) reported net income attributable to Methanex shareholders of $111 million ($1.36 per common share on a diluted basis) compared to net income of $169 million ($2.00 per common share on a diluted basis) in the first quarter of 2018. Adjusted EBITDA for the second quarter of 2018 was $275 million and Adjusted net income was $143 million ($1.75 per common share). This compares with Adjusted EBITDA of $306 million and Adjusted net income of $171 million ($2.03 per common share) for the first quarter of 2018.
John Floren, President and CEO of Methanex commented, "Methanol prices have remained strong through the second quarter as a result of healthy methanol demand from energy-related and traditional chemical applications combined with various industry production outages globally resulting in tight market conditions. Our average realized price increased slightly to $405 per tonne in the second quarter compared to $402 per tonne in the first quarter of 2018. Our Adjusted EBITDA reflects the impact of lower sales of produced product as a result of our reduced production volume in New Zealand in the quarter."
"We returned $241 million to shareholders through our regular dividend and share repurchases during the second quarter. To June 30, 2018 we have repurchased 3,850,000 common shares, of the 6,590,095 approved, for approximately $253 million since the start of our normal course issuer bid on March 13, 2018."
"In addition, the restart of our Chile IV plant is on track to be complete by the end of Q3 2018. The investments we have made over the past few years to increase our production capability have substantially improved our earnings power and ability to generate significant free cash flow at a wide range of methanol prices. We have low capital and financing requirements in the near term and have $320 million of cash on hand at the end of the second quarter, a committed revolving credit facility and a robust balance sheet. Our balanced approach to capital allocation remains unchanged. We believe we are well positioned to meet our financial commitments, pursue our growth opportunities and deliver on our commitment to return excess cash to shareholders through dividends and share repurchases," Floren said.
FURTHER INFORMATION
The information set forth in this news release summarizes Methanex's key financial and operational data for the second quarter of 2018. It is not a complete source of information for readers and is not in any way a substitute for reading the second quarter 2018 Management’s Discussion and Analysis ("MD&A") dated July 25, 2018 and the unaudited condensed consolidated interim financial statements for the period ended June 30, 2018, both of which are available from the Investor Relations section of our website at www.methanex.com. The MD&A and the unaudited condensed consolidated interim financial statements for the period ended June 30, 2018 are also available on the Canadian Securities Administrators' SEDAR website at www.sedar.com and on the United States Securities and Exchange Commission's EDGAR website at www.sec.gov.
FINANCIAL AND OPERATIONAL DATA
Three Months Ended | Six Months Ended | ||||||||||
($ millions except per share amounts and where noted) | Jun 30 2018 | Mar 31 2018 | Jun 30 2017 | Jun 30 2018 | Jun 30 2017 | ||||||
Production (thousands of tonnes) (attributable to Methanex shareholders) | 1,648 | 1,943 | 1,614 | 3,591 | 3,480 | ||||||
Sales volume (thousands of tonnes) | |||||||||||
Methanex-produced methanol | 1,729 | 1,884 | 1,790 | 3,613 | 3,546 | ||||||
Purchased methanol | 709 | 613 | 387 | 1,322 | 899 | ||||||
Commission sales | 329 | 321 | 297 | 650 | 601 | ||||||
Total sales volume 1 | 2,767 | 2,818 | 2,474 | 5,585 | 5,046 | ||||||
Methanex average non-discounted posted price ($ per tonne) 2 | 478 | 475 | 398 | 476 | 418 | ||||||
Average realized price ($ per tonne) 3 | 405 | 402 | 327 | 403 | 347 | ||||||
Revenue | 950 | 962 | 669 | 1,912 | 1,480 | ||||||
Adjusted revenue | 972 | 987 | 716 | 1,959 | 1,548 | ||||||
Adjusted EBITDA | 275 | 306 | 174 | 581 | 441 | ||||||
Cash flows from operating activities | 290 | 244 | 243 | 534 | 458 | ||||||
Adjusted net income | 143 | 171 | 74 | 314 | 214 | ||||||
Net income (attributable to Methanex shareholders) | 111 | 169 | 84 | 280 | 216 | ||||||
Adjusted net income per common share | 1.75 | 2.03 | 0.85 | 3.79 | 2.40 | ||||||
Basic net income per common share | 1.36 | 2.02 | 0.96 | 3.39 | 2.43 | ||||||
Diluted net income per common share | 1.36 | 2.00 | 0.89 | 3.38 | 2.39 | ||||||
Common share information (millions of shares) | |||||||||||
Weighted average number of common shares | 82 | 84 | 88 | 83 | 89 | ||||||
Diluted weighted average number of common shares | 82 | 84 | 88 | 83 | 89 | ||||||
Number of common shares outstanding, end of period | 80 | 83 | 87 | 80 | 87 |
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. Methanex-produced methanol includes any volume produced by Chile using natural gas supplied from Argentina under a tolling arrangement ("Tolling Volume"). There was 48,000 MT of Tolling Volume produced in the second quarter of 2018 and 40,000MT in the first quarter of 2018. There was no Tolling Volume in the second quarter of 2017.
2 Methanex average non-discounted posted price represents the average of our non-discounted posted prices in North America, Europe and Asia Pacific weighted by sales volume. Current and historical pricing information is available at www.methanex.com.
3 Average realized price is calculated as revenue, excluding commissions earned and the Egypt non-controlling interest share of revenue, but including an amount representing our share of Atlas revenue, divided by the total sales volume of Methanex-produced and purchased methanol, but excluding Tolling Volume.
A reconciliation from net income attributable to Methanex shareholders to Adjusted net income and the calculation of Adjusted net income per common share is as follows:
Three Months Ended | Six Months Ended | ||||||||||||||||
Jun 30 | Mar 31 | Jun 30 | Jun 30 | Jun 30 | |||||||||||||
($ millions except number of shares and per share amounts) | 2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income (attributable to Methanex shareholders) | $ | 111 | $ | 169 | $ | 84 | $ | 280 | $ | 216 | |||||||
Mark-to-market impact of share-based compensation, net of tax | 32 | 2 | (10 | ) | 34 | (2 | ) | ||||||||||
Adjusted net income | $ | 143 | $ | 171 | $ | 74 | $ | 314 | $ | 214 | |||||||
Diluted weighted average shares outstanding (millions) | 82 | 84 | 88 | 83 | 89 | ||||||||||||
Adjusted net income per common share | $ | 1.75 | $ | 2.03 | $ | 0.85 | $ | 3.79 | $ | 2.40 | |||||||
PRODUCTION HIGHLIGHTS
Q2 2018 | Q1 2018 | Q2 2017 | YTD Q2 2018 | YTD Q2 2017 | |||||||||
(thousands of tonnes) | Operating Capacity 1 | Production | Production | Production | Production | Production | |||||||
New Zealand 2 | 608 | 252 | 487 | 350 | 739 | 883 | |||||||
Geismar (USA) | 500 | 518 | 513 | 437 | 1,031 | 930 | |||||||
Trinidad (Methanex interest) 3 | 500 | 442 | 459 | 449 | 901 | 845 | |||||||
Egypt (50% interest) | 158 | 165 | 165 | 159 | 330 | 318 | |||||||
Medicine Hat (Canada) | 150 | 143 | 153 | 159 | 296 | 277 | |||||||
Chile 4 | 220 | 128 | 166 | 60 | 294 | 227 | |||||||
2,136 | 1,648 | 1,943 | 1,614 | 3,591 | 3,480 |
1 Operating capacity includes only those facilities which are currently capable of operating, but excludes any portion of an asset that is underutilized due to a lack of natural gas feedstock over a prolonged period of time. Our current annual operating capacity is 8.5 million tonnes, including 0.9 million tonnes related to our Chile operations. The operating capacity of our production facilities may be higher than original nameplate capacity as, over time, these figures have been adjusted to reflect ongoing operating efficiencies at these facilities. Actual production for a facility in any given year may be higher or lower than operating capacity due to a number of factors, including natural gas composition or the age of the facility's catalyst.
2 The operating capacity of New Zealand is made up of the two Motunui facilities and the Waitara Valley facility.
3 The operating capacity of Trinidad is made up of the Titan (100% interest) and Atlas (63.1% interest) facilities.
4 The production capacity of our Chile I and IV facilities is 1.7 million tonnes annually assuming access to natural gas feedstock.
Key production and operational highlights during the second quarter include:
CONFERENCE CALL
A conference call is scheduled for July 26, 2018 at 12:00 noon ET (9:00 am PT) to review these second quarter results. To access the call, dial the conferencing operator ten minutes prior to the start of the call at (416) 340-2216, or toll free at (800) 273-9672. A simultaneous audio-only webcast of the conference call can be accessed from our website at www.methanex.com and will also be available following the call. A playback version of the conference call will be available until August 9, 2018 at (905) 694-9451, or toll free at (800) 408-3053. The passcode for the playback version is 9087593#.
ABOUT METHANEX
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".
FORWARD-LOOKING INFORMATION WARNING
This second quarter 2018 press release contains forward-looking statements with respect to us and the chemical industry. By its nature, forward-looking information is subject to numerous risks and uncertainties, some of which are beyond the Company's control. Readers are cautioned that undue reliance should not be placed on forward-looking information as actual results may vary materially from the forward-looking information. Methanex does not undertake to update, correct or revise any forward-looking information as a result of any new information, future events or otherwise, except as may be required by applicable law. Refer to Forward-Looking Information Warning in the second quarter 2018 Management's Discussion and Analysis for more information which is available from the Investor Relations section of our website at www.methanex.com, 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.
NON-GAAP MEASURES
The Company has used the terms Adjusted EBITDA, Adjusted net income, Adjusted net income per common share, Adjusted revenue and operating income throughout this document. These items are non-GAAP measures that do not have any standardized meaning prescribed by GAAP. These measures represent the amounts that are attributable to Methanex Corporation shareholders and are calculated by excluding the mark-to-market impact of share-based compensation as a result of changes in our share price and the impact of certain items associated with specific identified events. Refer to Additional Information - Supplemental Non-GAAP measures on page 13 of the Company's MD&A for the period ended June 30, 2018 for reconciliations to the most comparable GAAP measures. Unless otherwise indicated, the financial information presented in this release is prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").
For further information, contact:
Kim Campbell
Manager, Investor Relations
Methanex Corporation
604-661-2600