Methanex Second Quarter 2021 Results Demonstrate Favourable Methanol Industry Fundamentals and Strong Cash Generation Capability
July 28, 2021 at 17:00 PM EDT
Except where otherwise noted, all currency amounts are stated in United States dollars.
VANCOUVER, British Columbia, July 28, 2021 (GLOBE NEWSWIRE) -- For the second quarter of 2021, Methanex (TSX:MX) (NASDAQ:MEOH) reported net income attributable to Methanex shareholders of $107 million ($1.31 net income per common share on a diluted basis) compared to net income of $105 million ($1.19 net income per common share on a diluted basis) in the first quarter of 2021. Adjusted EBITDA for the second quarter of 2021 was $262 million and Adjusted net income was $95 million ($1.24 Adjusted net income per common share). This compares with Adjusted EBITDA of $242 million and Adjusted net income of $82 million ($1.07 Adjusted net income per common share) for the first quarter of 2021.
We increased our average realized price in the second quarter of 2021 to $376 per tonne from $363 per tonne in the first quarter of 2021. Strong methanol demand and ongoing industry supply challenges supported higher methanol prices in the second quarter, with tight market conditions continuing into the third quarter of 2021. Our Adjusted EBITDA of $262 million increased by $20 million over the first quarter of 2021, demonstrating the significant leverage our earnings have to methanol prices.
We ended the quarter with over $750 million in cash, a $600 million undrawn construction facility, a $300 million undrawn revolving credit facility and no debt maturities until the end of 2024. In addition, we recently announced an agreement on key commercial terms for a strategic shipping partnership between Methanex, Waterfront Shipping (a subsidiary of Methanex) and Mitsui O.S.K. Lines, Ltd. ("MOL"). We anticipate this partnership will realize strategic benefits for our Waterfront Shipping business and unlock $145 million in non-dilutive capital to further strengthen our financial position.
We also recently announced a restart of construction on our Geismar 3 project, a 1.8 million tonne methanol plant located adjacent to the existing Geismar 1 and 2 plants. The project is significantly de-risked and is well-positioned to be completed on-time and on budget. We will restart construction in October 2021 with commercial operations targeted at the end of 2023 or early 2024.
John Floren, President and CEO of Methanex, commented, “Current methanol industry dynamics are favourable, and our outlook for the methanol industry is positive. We believe that new industry supply, including our Geismar 3 project, will be needed to meet growing methanol demand. Our Geismar 3 project has distinct project advantages and robust project economics that will strengthen our asset portfolio and significantly increase our future cash generation capability. We recently increased our quarterly dividend to $0.125 per share, and Geismar 3 will support a substantial increase in our shareholder distribution potential in the coming years. We believe that Geismar 3 will deliver significant long-term value to our shareholders.”
The information set forth in this news release summarizes Methanex's key financial and operational data for the second quarter of 2021. It is not a complete source of information for readers and is not in any way a substitute for reading the second quarter 2021 Management’s Discussion and Analysis ("MD&A") dated July 28, 2021 and the unaudited condensed consolidated interim financial statements for the period ended June 30, 2021, 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, 2021 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
A reconciliation from net income (loss) attributable to Methanex shareholders to Adjusted net income (loss) and the calculation of Adjusted net income (loss) per common share is as follows:
Key production and operational highlights during the second quarter and production outlook for 2021 include:
A conference call is scheduled for July 29, 2021 at 11:00 am ET (8:00 am PT) to review these second quarter results. To access the call, dial the conferencing operator fifteen 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 4826256#. 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 28, 2021 at (905) 694-9451, or toll free at (800) 408-3053. The passcode for the playback version is 3699057#.
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 2021 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 2021 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.
The Company has used the terms Adjusted EBITDA, Adjusted net income (loss), Adjusted net income (loss) per common share, Adjusted revenue and operating income (loss) 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, 2021 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").
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