Q3 adjusted net halves at methanol producer Methanex

31 Oct '15

3 min read

For the third quarter of 2015, adjusted net income halved over the second quarter of 2015 at Methanex, the world's largest producer and supplier of methanol.

For the three months to September 30, 2015, adjusted net income dropped steeply to $23 million or $0.26 per diluted share as against $51 million or $0.56 per diluted share in the previous quarter.

“The Canadian company recorded adjusted EBITDA of $95 million for the third quarter of 2015 compared with $129 million for the second quarter of 2015,” Methanex said in a press release.

“The decrease in adjusted EBITDA was primarily due to a decrease in our average realised price at $323 per ton for the third quarter of 2015 from $350 per ton in the second quarter of 2015,” it explained.

Production for the third quarter of 2015 was 1.25 million tons compared with 1.28 million tons for the prior quarter.

Sales of Methanex-produced methanol were 1.23 million tons in the reporting quarter vis-à-vis 1.20 million tons in the earlier quarter.

During the third quarter of 2015, Methanex entered into forward contracts to hedge natural gas prices for the Geismar 2 facility for a 10 year period.

As of October 28, 2015 it had hedged approximately 40 per cent of the natural gas requirements of the facility.

“We continue to make excellent progress on the construction of the Geismar 2 facility and we expect to be producing the first methanol by the end of 2015,” it added.

During the third quarter of 2015, Methanex paid a $0.275 per share dividend to shareholders for a total of $25 million.

During the quarter under review, the company repurchased 629,100 common shares for $27 million and under the current normal course issuer bid, it is authorised to purchase up to a further 3.2 million shares.

CEO John Floren said, "Our third quarter adjusted net income reflects lower average realised methanol pricing compared to the second quarter of 2015.”

“Prices decreased as the affordability for methanol into certain energy applications moved lower relative to the second quarter, in alignment with lower oil and related product prices," he too added.

“With cash on hand, an undrawn credit facility, a robust balance sheet, and strong future cash generation capability, we are well positioned to meet our financial commitments,” Floren stated.

Methanex is a Vancouver-based, publicly traded company and is the world's largest producer and supplier of methanol to major international markets. (AR)

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