Methanex ((TSE:MX)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Methanex’s Fourth Quarter Earnings Call Highlights Strong Performance Despite Gas Supply Challenges
The recent earnings call of Methanex reflected a positive sentiment overall, with the company showcasing significant achievements in safety performance, financial stability, and operational improvements. Despite facing some challenges with gas supply issues in New Zealand and Egypt, Methanex’s leadership expressed optimism about their ongoing strategies and future outlook.
Record Safety Performance
Methanex achieved its best safety performance on record in 2024, highlighting the company’s robust commitment to responsible care. This accomplishment underscores the importance Methanex places on maintaining a safe working environment, which is integral to its operational success.
Increased Methanol Pricing
The company reported a global average realized methanol price of $370 per metric ton in Q4 2024, marking a $14 increase from the previous quarter. In Europe, the quarterly price was posted at €700 per ton, a substantial rise of €130 per ton from Q4, reflecting strong market demand.
Strong Financial Position
Methanex ended Q4 with a strong financial position, holding $879 million in cash and having access to a $500 million undrawn revolving credit facility. The successful execution of the OCI acquisition financing plan further solidifies its financial stability.
Operational Improvements in Chile
In December, Methanex achieved a production milestone by producing 150,000 tons of methanol, the highest monthly level since 2007. With expectations of producing 1.3 to 1.4 million tons in 2025, the company is poised for continued operational success in the region.
Full Year Production Increase
For the full year 2024, Methanex reported sales of just over 6 million tons and an adjusted EBITDA of $764 million, showcasing growth from previous years. This reflects the company’s ability to enhance production and financial outcomes despite challenging conditions.
Gas Supply Concerns in New Zealand
Production in New Zealand remains dependent on gas availability, with the sustainability of future production being uncertain due to the necessity of selling gas into the electricity market. This poses a challenge that Methanex will need to address moving forward.
Potential Gas Curtailments in Egypt
Methanex anticipates potential gas supply curtailments in Egypt in 2025, particularly during summer months. These expected disruptions are due to complex supply and demand dynamics, requiring strategic planning to mitigate impact.
MTO Operating Rate Fluctuations
The company experienced decreased MTO operating rates late in Q4, primarily due to increased supply constraints from Iran. Methanex expects these fluctuations to continue, influencing operational strategies.
Forward-Looking Guidance
Methanex’s forward-looking guidance projects growth in methanol demand in 2025, similar to the rate in 2024, driven by traditional chemical and energy applications. The company expects to achieve approximately 7.5 million equity tons of production in 2025, considering planned turnarounds and gas feedstock availability. Methanex also anticipates maintaining a robust pricing environment, with plans to reduce debt by $550 million to $600 million over the next 18 months, assuming a $350 realized methanol price.
In summary, the earnings call highlighted Methanex’s strong performance and strategic initiatives, despite facing challenges with gas supply in certain regions. The company’s achievements in safety, pricing, and operational improvements underscore its robust position in the market, while forward-looking guidance reflects confidence in continued growth and financial stability.
