"We continue to be optimistic that our underutilized 1.7 million tonne Chile facilities represent a very low capital cost growth opportunity for Methanex due to the significant progress in developing natural gas reserves in the area. We have low capital and financing requirements in the medium term, and we have the ability to generate significant free cash flow at a wide range of methanol prices. With $361 million of cash on hand at the end of the second quarter, a revolving credit facility, a robust balance sheet, and strong cash generation capability, we believe we are well positioned to meet our financial commitments, pursue our near-term growth opportunities in Chile and deliver on our commitment to return excess cash to shareholders through dividends and share repurchases," Floren said.FURTHER INFORMATIONThe information set forth in this news release summarizes Methanex's key financial and operational data for the second quarter of 2017. It is not a complete source of information for readers and is not in any way a substitute for reading the second quarter 2017 Management's Discussion and Analysis ("MD&A") dated July 26, 2017 and the unaudited condensed consolidated interim financial statements for the period ended June 30, 2017, both of which are available from the Investor Relations section of our website at www.methanex.com. The MD&A and the unaudited condensed consolidated interim financial statements for the period ended June 30, 2017 are also available on the Canadian Securities Administrators' SEDAR website at www.sedar.com and on the United States Securities and Exchange Commission's EDGAR website at www.sec.gov. FINANCIAL AND OPERATIONAL DATA
|Three Months Ended||Six Months Ended|
|($ millions except per share amounts and where noted)||Jun 30 2017||Mar 31 2017||Jun 30 2016||Jun 30 2017||Jun 30 2016|
|Production (thousands of tonnes) (attributable to Methanex shareholders)||1,614||1,866||1,770||3,480||3,409|
|Sales volume (thousands of tonnes)|
|Total sales volume 1||2,474||2,572||2,362||5,046||4,481|
|Methanex average non-discounted posted price ($ per tonne) 2||398||437||260||418||266|
|Average realized price ($ per tonne) 3||327||365||223||347||227|
|Cash flows from operating activities||250||221||34||470||104|
|Adjusted net income (loss)||74||140||(31||)||214||(55||)|
|Net income (loss) (attributable to Methanex shareholders)||84||132||(3||)||216||(26||)|
|Adjusted net income (loss) per common share||0.85||1.56||(0.34||)||2.40||(0.62||)|
|Basic net income (loss) per common share||0.96||1.47||(0.03||)||2.43||(0.29||)|
|Diluted net income (loss) per common share||0.89||1.46||(0.08||)||2.39||(0.34||)|
|Common share information (millions of shares)|
|Weighted average number of common shares||88||90||90||89||90|
|Diluted weighted average number of common shares||88||90||90||89||90|
|Number of common shares outstanding, end of period||87||89||90||87||90|
|Three Months Ended||Six Months Ended|
|($ millions except number of shares and per share amounts)||Jun 30 2017||Mar 31 2017||Jun 30 2016||Jun 30 2017||Jun 30 2016|
|Net income (loss) (attributable to Methanex shareholders)||$||84||$||132||$||(3||)||$||216||$||(26||)|
|Mark-to-market impact of share-based compensation, net of tax||(10||)||8||(7||)||(2||)||(8||)|
|Argentina gas settlement, net of tax||—||—||(21||)||—||(21||)|
|Adjusted net income (loss)||$||74||$||140||$||(31||)||$||214||$||(55||)|
|Diluted weighted average shares outstanding (millions)||88||90||90||89||90|
|Adjusted net income (loss) per common share||$||0.85||$||1.56||$||(0.34||)||$||2.40||$||(0.62||)|
- We recorded net income attributable to Methanex shareholders of $84 million during the second quarter of 2017 compared to net income of $132 million in the first quarter of 2017. The decrease in earnings is primarily due to a decrease in our average realized methanol price during the second quarter. Our average realized price decreased to $327 per tonne for the second quarter of 2017 from $365 per tonne for the first quarter of 2017.
- We recorded Adjusted EBITDA of $174 million for the second quarter of 2017 compared with $267 million for the first quarter of 2017. Adjusted net income was $74 million for the second quarter of 2017 compared to Adjusted net income of $140 million for the first quarter of 2017.
- Total sales volume for the second quarter of 2017 was 2,474,000 tonnes compared with 2,572,000 tonnes for the first quarter of 2017. Sales of Methanex-produced methanol were 1,790,000 tonnes in the second quarter of 2017 compared with 1,756,000 tonnes in the first quarter of 2017.
- Cash flows from operating activities in the second quarter of 2017 were $250 million compared with $221 million for the first quarter of 2017, an increase of $29 million. Cash flows from operating activities in the quarter increased despite a decrease in Adjusted EBITDA primarily as a result of a reduction in non-cash working capital.
- Our planned capital expenditures directed towards maintenance, turnarounds and catalyst changes for operations, including our 63.1% share of Atlas and 50% of Egypt, is currently estimated to be approximately $40 million to the end of 2017.
- We announced today that the Board of Directors approved an amendment to the normal course issuer bid which increases the number of common shares that may be purchased from 4,492,141 to 6,152,358 common shares, representing 10% of the public float at the time of the announcement of the bid and the maximum number of common shares that may be purchased under this bid. To date we have repurchased 3,755,000 common shares under the current bid for approximately $168 million.
- During the second quarter of 2017 we paid a $0.30 per common share dividend to shareholders for a total of $26 million.
|Q2 2017||Q1 2017||Q2 2016||YTD Q2 2017||YTD Q2 2016|
|(thousands of tonnes)||Operating Capacity 1||Production||Production||Production||Production||Production|
|New Zealand 2||608||350||533||577||883||1,086|
|Trinidad (Methanex interest) 3||500||449||396||417||845||730|
|Egypt (50% interest)||158||159||159||53||318||128|
|Medicine Hat (Canada)||150||159||118||123||277||282|
- New Zealand production was 350,000 tonnes, impacted mainly as a result of a planned turnaround at the Motunui 1 facility.
- Geismar production was 437,000 tonnes, impacted by planned maintenance activities.
- Trinidad production was 449,000 tonnes. We continue to experience gas curtailments in Trinidad with gas availability in the second quarter of 2017 at improved levels compared to the first quarter of 2017.
- Egypt production was 159,000 tonnes (Methanex share). The plant continued to run at high rates in the quarter.
- Medicine Hat production was 159,000 tonnes. The plant was shut down for repairs for part of the first quarter of 2017 and since restart has operated at high rates.
- Chile production was 60,000 tonnes, produced using only natural gas supply from Chile. Production was impacted by lower gas deliveries during the southern hemisphere winter months and a mechanical issue.
FORWARD-LOOKING INFORMATION WARNINGThis second quarter 2017 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 2017 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 (loss), Adjusted net income (loss) 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 12 of the Company's MD&A for the period ended June 30, 2017 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:Sandra DaycockDirector, Investor RelationsMethanex Corporation604-661-2600