Methanex Corporation (NASDAQ:MEOH) Q3 2022 Earnings Conference Call October 27, 2022 11:00 AM ET Company Participants Sarah Herriott - Director, IR John Floren - President and CEO Rich Sumner - Incoming CEO Conference Call Participants Joel Jackson - BMO Capital Markets Ben Isaacson - Scotiabank Nelson Ng - RBC Capital Markets Steve Hansen - Raymond James Josh Spector - UBS Jacob Bout - CIBC Hassan Ahmed - Alembic Global Matthew Blair - TPH Chris Shaw - Monness Crespi Steve Hansen - Raymond James Operator W ...

Methanex Corporation (NASDAQ:MEOH) Q2 2022 Earnings Conference Call July 28, 2022 11:00 AM ET Company Participants Sarah Herriott - Director, IR John Floren - President and CEO Conference Call Participants Ben Isaacson - Scotiabank Joel Jackson - BMO Capital Markets Steve Hansen - Raymond James Nelson Ng - RBC Capital Markets Matthew Blair - TPH Josh Spector - UBS Laurence Alexander - Jefferies Hassan Ahmed - Alembic Global Charles Neivert - Piper Sandler John Roberts - Credit Suisse Operator Welcome to the ...

Financial Data and Key Metrics Changes - In Q1 2022, Methanex reported an average realized price of $425 per ton, adjusted EBITDA of $337 million, and adjusted net income of $159 million or $2.16 per share [11][19][21] - The company ended Q1 2022 with approximately $1.1 billion in cash and $600 million of undrawn backup liquidity [19][23] Business Line Data and Key Metrics Changes - Production levels were lower in Q1 2022 compared to Q4 2021 due to lower gas availability in New Zealand and planned outages in Egypt [17][18] - The company forecasts 2022 production to be approximately 7 million equity tonnes, although actual production may vary [18] Market Data and Key Metrics Changes - Global methanol demand increased slightly in Q1 2022, driven by higher operating rates for methanol-to-olefins (MTO) plants [12] - North American methanol prices decreased by $21 per ton to $638 per ton, while Asia-Pacific and China prices decreased by $20 and $30 per ton to $520 and $470 per ton respectively [15] Company Strategy and Development Direction - The company is focused on progressing the Geismar 3 project, which is expected to reach commercial production by late 2023 or early 2024, enhancing cash flow generation capability [21][22] - Methanex aims to maintain a disciplined approach to capital allocation, prioritizing cash generation, growth opportunities, and returning excess cash to shareholders [19][23] Management's Comments on Operating Environment and Future Outlook - Management noted that the methanol market fundamentals remain solid, with no significant evidence of demand destruction despite elevated prices and geopolitical tensions [16][25] - The company expects Q2 2022 to be another excellent quarter for EBITDA generation and earnings, with strong cash generation and a fully funded G3 project [25][26] Other Important Information - The company announced a 16% increase in the quarterly dividend to $0.145 per share and an increase in the share buyback program [23] - Methanex released its 2021 sustainability report, outlining commitments to reduce greenhouse gas emissions intensity [24] Q&A Session Summary Question: Impact of COVID lockdowns in China on methanol demand - Management indicated no current impact on demand from COVID lockdowns, with pricing in China around $365 per ton, below the cost curve [29] Question: Factors setting methanol prices - Management stated that supply issues have driven higher pricing rather than the cost curve, with demand holding up well [40][41] Question: Update on G3 project costs and inflation - Management confirmed that labor is the primary cost concern moving forward, with no significant inflation pressures observed [44][46] Question: Dividend outlook and potential for special dividends - Management expressed a preference for share buybacks over special dividends, citing flexibility and tax implications for shareholders [81][82] Question: European methanol capacity and potential curtailments - Management noted that high gas prices in Europe make methanol production challenging, leading to potential curtailments [87][89] Question: Inventory levels in the methanol market - Management reported low inventory levels, as customers are running supply chains lean due to high prices [90]

Financial Data and Key Metrics Changes - In Q4 2021, Methanex reported the highest quarterly adjusted EBITDA in the company's history at $340 million and a record adjusted net income of $185 million, or $2.43 per share, primarily due to higher realized prices and increased sales volume [11][12] - For the full year 2021, the company achieved an adjusted EBITDA of $1.1 billion and adjusted net income of $460 million, or $6.03 per share, significantly stronger compared to 2020 [12] Business Line Data and Key Metrics Changes - Production levels in Q4 2021 were significantly higher compared to Q3 2021, driven by higher gas availability in Chile and New Zealand, as well as record production at Geismar facilities [23] - In New Zealand, production was higher following the completion of a short-term commercial arrangement, with an estimated production of approximately 1.5 million tonnes in 2022 from the two Motunui plants [24] - Geismar facilities achieved record quarterly production, with an annual operating capacity increase of 10% to 2.2 million tonnes due to a debottlenecking project [25] Market Data and Key Metrics Changes - Global methanol demand in 2021 increased by approximately 5% to 86 million tonnes, driven by recovery in traditional chemical applications [13] - In Q4 2021, global methanol demand decreased by approximately 2% compared to Q3 2021, primarily due to lower demand from MTO producers and restrictions in China [14] - Methanol prices fluctuated in Q4 2021, with an average realized price increase of $55 per tonne to $445 per tonne compared to Q3 2021 [16] Company Strategy and Development Direction - The company remains focused on managing through the pandemic, progressing the G3 project on time and on budget, and enhancing financial flexibility [33] - Methanex plans to use generated cash to maintain operations, pursue growth opportunities, and return excess cash to shareholders, with a preference for share buybacks [31][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about methanol market fundamentals, expecting robust demand growth in 2022 despite supply challenges [49] - The company anticipates a strong first quarter of 2022, with EBITDA expected to be similar to Q4 2021 due to higher forecasted sales [32] Other Important Information - The company ended Q4 2021 with $932 million in cash and $900 million of undrawn liquidity, positioning it well for future capital expenditures [28] - Methanex's G3 project is expected to be completed on time and on budget by the end of 2023 or early 2024, with a capital cost estimate of $1.25 billion to $1.35 billion [29][30] Q&A Session Summary Question: What was the percentage of sales shifted to China? - Management indicated that the percentage is around 20% to 25% but did not provide an exact number during the call [38][39] Question: What is the guidance for the discount rate in 2022? - The company forecasts a discount rate of 20% on average for 2022 [40] Question: How is the natural gas pricing situation in Europe affecting capacity? - Management noted that there is capacity offline in Europe due to high energy prices and geopolitical tensions, impacting methanol production [43][44] Question: What is the outlook for supply and demand fundamentals in 2022? - Management expects supply challenges to persist in 2022, with traditional demand growing at GDP rates [46][49] Question: How is the dual control energy policy in China affecting production? - The company expects production rates in China to be higher in the summer months compared to Q4 2021, as natural gas becomes more available [57] Question: What is the impact of the discount rate on realized prices? - Management emphasized that realized prices are what drive earnings, and the discount rate varies by region [88][102] Question: What are the plans for capital allocation moving forward? - The company plans to focus on completing the G3 project and returning excess cash to shareholders through buybacks and dividends [109]

Methanex Corporation (NASDAQ:MEOH) Q3 2021 Earnings Conference Call October 28, 2021 11:00 AM ET Company Participants Kim Campbell - Director, Investor Relations John Floren - President & Chief Executive Officer Rich Sumner - Senior Vice President, Global Marketing & Logistics Conference Call Participants Joel Jackson - BMO Capital Markets Nelson Ng - RBC Capital Markets Jacob Bout - CIBC Edlain Rodriguez - Jefferies Mike Leithead - Barclays Hassan Ahmed - Alembic Global Advisors Eric Petrie - Citi Matthew ...

Financial Data and Key Metrics Changes - The average realized price increased to $376 per tonne, a $13 increase compared to the first quarter [7] - Adjusted EBITDA rose to $262 million, an increase of $20 million from the first quarter [7] - Adjusted net income was $95 million or $1.24 per share, up $13 million or $0.17 per share from the first quarter [7] Business Line Data and Key Metrics Changes - Production in New Zealand was lower due to reduced gas availability, with an estimated production of 1.4 million tonnes for 2021 [10][12] - Geismar's production increased due to the completion of a planned turnaround, with an annual operating capacity now at 2.2 million tonnes, a 10% increase [10] - Trinidad's production was higher than the first quarter, with an estimated production of 1.1 million tonnes for 2021 [11] - Chile's production was lower than the first quarter, with an estimated production of 800,000 to 900,000 tonnes for 2021 [12] Market Data and Key Metrics Changes - Global methanol demand increased by approximately 3% in the second quarter compared to the first quarter, expected to surpass pre-pandemic levels later this year [8] - Current methanol prices in August were $542 per tonne in North America and $420 per tonne in Asia Pacific [9] - The industry cost curve in China has increased to approximately $300 to $320 per tonne due to rising coal and natural gas prices [8] Company Strategy and Development Direction - The company announced the restart of construction on the Geismar 3 project, with a capital cost estimate of $1.25 billion to $1.35 billion [16] - The company aims to maintain financial flexibility, targeting a minimum of $300 million in cash on hand and reducing debt levels over time [17] - The company plans to increase shareholder distributions through share buybacks and dividends when methanol prices reach approximately $325 per tonne or higher [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the methanol market, citing strong demand and low inventory levels [8] - The company expects third-quarter production and adjusted EBITDA results to be similar to the second quarter [18] - Management noted that global demand for methanol is expected to continue growing through the second half of the year [55] Other Important Information - The company has over $750 million in cash on its balance sheet and a strong financial position [14] - The company is committed to enhancing sustainability and ESG-related disclosures [19] Q&A Session Summary Question: Update on gas availability in Chile - Management indicated that gas availability in Argentina and Chile has improved, expecting both plants in Chile to operate by late third quarter or early fourth quarter [22][23] Question: Freight market impact - Management noted that liquid tanker rates are below average, and they expect higher prices to improve profitability [32] Question: Methanol unit operations at LyondellBasell - Management did not have specific information but mentioned that the unit was in a planned turnaround [35] Question: Demand growth forecast - Management expects demand to return to pre-pandemic levels later this year, with some applications still lagging [55] Question: Global shipping capacity for methanol - Management confirmed eight owned ships on order and expects more orders in the future, with significant demand from the industrial boiler market [68] Question: Liquidity and capital returns - Management reiterated their strategy to maintain cash reserves for G3 and return excess cash to shareholders flexibly [81] Question: Confidence in labor resources - Management expressed confidence in their labor capabilities, noting low turnover rates and a focus on diversity and inclusion [96]

Methanex Corporation (NASDAQ:MEOH) Q1 2021 Results Earnings Conference Call April 29, 2021 11:00 AM ET Company Participants Kim Campbell - Director of IR John Floren - President, CEO Ian Cameron - Senior VP of Finance & CFO Michael Herz - SVP of Corporate Development Conference Call Participants Jacob Bout - CIBC Ben Isaacson - Scotiabank Nelson Ing - RBC Capital Markets Matthew Blair - Tudor, Pickering, Holt Mike Leithead - Barclays Eric Petrie - Citi Matt Skowronski - UBS Joel Jackson - BMO Capital Market ...

Financial Data and Key Metrics Changes - In Q4 2020, the company recorded adjusted EBITDA of $136 million and adjusted net income of $12 million, or $0.15 per share, which was higher than Q3 results primarily due to realized prices [12] - For the full year 2020, adjusted EBITDA was $346 million, with an adjusted net loss of $123 million, or $1.62 per share, reflecting lower realized methanol prices compared to 2019 [12] Business Line Data and Key Metrics Changes - Production levels in New Zealand increased in Q4 due to improved gas supply, but the outlook for 2021 is uncertain due to expected lower gas deliveries [19][20] - Geismar facilities achieved record production in Q4, benefiting from a completed debottlenecking project, with an expected annual capacity of 2.2 million tonnes [21] - Production in Trinidad remained stable in Q4, but 2021 production is estimated to decline to 900,000 tonnes due to upstream production declines [22] - Chile's production was higher in Q4, but lower gas deliveries later in the quarter led to idling of one plant, with 2021 production estimated at 900,000 to 1,000,000 tonnes [24] - Egypt's production in Q4 was similar to Q3, with 2021 production forecasted to be similar to 2020 levels of 6.6 million tonnes [25] Market Data and Key Metrics Changes - Global methanol demand increased by approximately 2% in Q4 2020 compared to Q3, but overall demand for 2020 was down 3% compared to 2019 [13][14] - Methanol prices in North America and Asia Pacific increased in early 2021, with February prices at $492 per tonne and $430 per tonne respectively [16] - The industry cost curve is estimated at approximately $260 per tonne, influenced by higher coal prices [15] Company Strategy and Development Direction - The company remains focused on maintaining liquidity and financial flexibility while prioritizing safe and reliable operations [30] - The Geismar 3 project is on hold, with a decision expected in mid-2021, contingent on market conditions and economic recovery [27][42] - The company is cautious about future investments and will assess the demand recovery before making significant capital allocation decisions [65] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about early signs of economic recovery but remains cautious due to ongoing uncertainties from the COVID-19 pandemic [28] - The company expects realized methanol prices in Q1 2021 to be higher than in Q4 2020, with production levels anticipated to be similar [29] - The management highlighted the challenges in gas supply across various regions, impacting production capabilities [55] Other Important Information - The company ended 2020 with a strong liquidity position of over $800 million in cash and no debt maturities until the end of 2024 [26] - The company is committed to returning excess cash to shareholders through dividends and share repurchases [26] Q&A Session Summary Question: How does the company see normalization of various issues affecting operations? - Management indicated that predicting normalization is difficult, particularly regarding gas supply issues in New Zealand and Trinidad, which were unexpected [34] Question: How did the company manage to increase prices despite a weaker spot market? - Management explained that pricing decisions are based on supply-demand fundamentals and customer discussions, rather than solely on spot market prices [38] Question: What is the current status of the Geismar 3 project? - The company is targeting a decision on the Geismar 3 project in mid-2021, with ongoing evaluations of market conditions [42] Question: What are the expectations for methanol demand recovery? - Management noted that traditional demand was down 5% in 2020, with North America experiencing the most significant decline [80] Question: How does the company view the impact of LNG and coal price spikes on production? - Management stated that while coal prices could influence the cost curve, producers are currently running at full capacity due to favorable pricing dynamics [84]

Methanex Corporation (NASDAQ:MEOH) Q3 2020 Earnings Conference Call October 29, 2020 11:00 AM ET Company Participants Kim Campbell - Director, Investor Relations John Floren - President and Chief Executive Officer Conference Call Participants Ben Isaacson - Scotiabank Jacob Bout - CIBC Steve Hansen - Raymond James Cherilyn Radbourne - TD Securities John Roberts - UBS Jonas Oxgaard - Bernstein Eric Petrie - Citi Nelson Ng - RBC Capital Markets Hassan Ahmed - Alembic Global Advisors. Mike Leithead - Barclays ...

Financial Data and Key Metrics Changes - In Q2 2020, Methanex recorded adjusted EBITDA of $32 million and an adjusted net loss of $64 million, equating to $0.84 per share, significantly lower than the previous quarter due to reduced average realized prices and lower sales volumes [12][13] - Global methanol demand declined by approximately 5% or 1 million tons in Q2 2020 compared to Q1, and by approximately 12% or 2.5 million tons compared to Q4 2019 [14][15] Business Line Data and Key Metrics Changes - Methanol demand in China increased by approximately 4% in Q2 2020 versus Q1, driven by recovery in economic activity and improved fuel demand [16] - Outside of China, methanol demand declined by approximately 19% quarter-over-quarter due to lower manufacturing activity in key sectors like automotive and construction [18] Market Data and Key Metrics Changes - Global methanol supply declined by approximately 9% when comparing Q2 2020 to Q4 2019, with production in Q2 being 379,000 tons lower than in Q1 2020 [20] - Spot prices in China are currently marginally below the industry cost curve of approximately $200 to $220 per ton [21] Company Strategy and Development Direction - The company has deferred approximately $500 million in capital spending on the Geismar 3 project for up to 18 months to strengthen its balance sheet and preserve liquidity [23] - Methanex is focused on cash preservation and evaluating options to maintain financial capacity during the downturn, while planning for long-term demand growth for methanol [29][35] Management's Comments on Operating Environment and Future Outlook - The management expressed uncertainty regarding the full impact of the COVID-19 pandemic and lower oil prices on methanol demand, indicating that the near-term outlook remains uncertain [30] - Despite the challenges, the management believes in the long-term demand growth for methanol as it is a key ingredient in various applications [34] Other Important Information - The company ended the quarter with nearly $800 million in cash and has no near-term debt maturities, indicating a strong liquidity position [26] - Methanex has amended its credit facilities to provide financial covenant relief, allowing for greater flexibility in the current environment [27] Q&A Session Summary Question: Ability to push out G3 project timeline - Management confirmed that the completion date for the G3 project has been pushed out by another 12 months due to renegotiated terms with lenders [44] Question: Incremental costs from COVID-19 - Management indicated that the incremental costs related to COVID-19 were very minor, primarily associated with remote working [45] Question: Global methanol demand recovery - Management noted that demand outside China remains under pressure and is slow to recover, with significant declines still observed compared to Q4 2019 [46][47] Question: Inventory levels at Chinese ports - Management characterized current inventory levels in China as normal, despite a rise due to increased demand from MTO operations [51] Question: Methanol market contraction - Management explained that their sales volumes contracted more than the industry average due to a strategic decision to take certain plants offline in response to declining demand [60][62] Question: Turnaround plans for G1 and G2 - Management stated that G1 is not due for a turnaround for another three years, while G2 is approaching its turnaround schedule [64] Question: Trinidad gas supply negotiations - Management confirmed ongoing negotiations with the government to secure a profitable gas supply arrangement, with no immediate updates available [108] Question: MTO operating rates - Management reported that MTO operations remained high at around 90% during Q2, despite low pricing for ethylene and propylene [112] Question: Working capital and liquidity strategy - Management highlighted a positive working capital move in Q2, driven by methanol prices, and emphasized tight management of working capital going forward [120][124] Question: Methanol as a clean fuel alternative - Management reiterated that methanol is a viable alternative fuel and can meet future environmental standards, emphasizing its flexibility and availability [135]