Methanex Corp T.MX

Alternate Symbol(s): MEOH

Chemicals Basic Materials

Methanex Corporation is a producer and supplier of methanol to international markets in North America, Asia Pacific, Europe and South America. The Company’s operations consist of the production and sale of methanol, a commodity chemical. It operates production sites in Canada, Chile, Egypt, New Zealand, Trinidad and Tobago and the United States. It has three plants in New Zealand, Motunui 1, Motunui 2 and Waitara Valley. Its Trinidad production site supplies methanol to all methanol markets. Its Chile production site supplies methanol to customers in South America and Asia Pacific, having two plants in Chile, Chile I and Chile IV. Its Egypt plant is located on the Mediterranean Sea and primarily supply methanol to the domestic and European market. Its plant in Medicine Hat, Alberta, supplies methanol to customers in North America. It also has interest in two methanol facilities in Beaumont, Texas, one of which also produces ammonia and methanol facility in Delfzijl, Netherlands.

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Methanex Corp

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Post by retiredcfon Jul 29, 2021 10:11am

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Post# 33620495

TD

Maintain their US$54.00 target. GLTA

Methanex Corp.

(MEOH-Q, MX-T) US$33.60 | C$42.02

First Look: Q2/21 EBITDA in Line; High Prices Continue in August Event

Methanex reported Q2/21 adjusted EBITDA of $262mm, marginally above the consensus estimate of $258mm and our forecast of $260mm. The conference call is at 11:00 a.m. ET. Dial-in: 1-800-806-5484 (passcode 4826256).

Impact: NEUTRAL

Q2/21 Results: Adjusted EBITDA of $262mm was up 8% vs. Q1/21, largely due to the benefit of higher methanol prices. The discount rate vs. the weighted average posted price was high again at 19% vs. Methanex's guidance of 17% for the year, which may cause concern for the Street, as it seemed to in Q1/21, although the company has articulated that its strategy is to maximize its average realized price across all markets vs. minimizing the discount rate, and Methanex's Q2/21 average realized price was the highest since Q4/18.
Methanol Prices: The methanol supply/demand balance loosened a bit in Q2/21, as margins came under pressure for some methanol-to-olefins producers, and production in the Atlantic Basin recovered from Winter Storm Uri, but supply-side challenges have continued to-date in Q3/21, despite the ongoing start-up of a new plant in the U.S., with the latest issues relating to high prices/tight coal supply in China. Methanex's posted contract price in North America rolled at $542/tonne in August, which marks the fourth consecutive month at the highest price since mid-2014. The European posted contract price rolled at €410/tonne for Q3/21, and the Asia posted contract price was stable at $420/tonne in August, after spending five months at $430/tonne (Feb-June), the highest price since late-2018.

Geismar 3: We see Geismar 3 as a very attractive brownfield project, and Methanex intends to resume construction in October. The company expects to fund the completion of Geismar 3 with cash-on-hand and future free-cash-flow at an average realized price of $275/tonne+, which is below the normal pricing band of $300-$400/tonne, and well below the company's average realized price of $376/tonne in Q2/21. At a sustained average realized price of $325/tonne +, Methanex anticipates that it will have the capacity to further deleverage and increase shareholder distributions during the Geismar 3 construction period.