Methanex Swings to $198M Profit on Record Methanol Prices, Guides Lower for Q3
MEOH sits 69% above its 52-week low of $32.
Summary
Methanex reported Q2 net income of $198M, record Adjusted EBITDA of $577M, and fully repaid its term loan, but guided for lower methanol prices and earnings in Q3.
Key Events · Earnings and Guidance · MEOH
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Record Earnings on Price Spike
Net income swung to $198M from a $14M loss in Q1, driven by a 51% jump in average realized methanol prices to $529/tonne. Adjusted EBITDA hit a record $577M.
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Strong Cash Flow, Debt Repaid
Operating cash flow was $439M, enabling full repayment of the $290M Term Loan A. Cash balance ended at $383M with a $400M undrawn revolver.
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Titan Plant Idled, $115M Impairment
The Trinidad Titan plant was indefinitely idled, resulting in a $115M non-cash impairment charge (net of tax) and $12M in restructuring costs.
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Q3 Guidance: Lower Prices, Lower EBITDA
Management expects July-August average realized prices of $460-$485/tonne, down from Q2's $529, and warned of lower Adjusted EBITDA in Q3.
Analysis · MEOH · Industrial Applications And Services
A dramatic earnings beat defined Methanex's Q2, as net income swung from a $14M loss to a $198M profit, fueled by a 51% surge in average realized methanol prices to $529/tonne. Adjusted EBITDA reached a record $577M, and operating cash flow of $439M allowed the company to fully repay its $290M Term Loan A. Yet the quarter also carried a $115M non-cash impairment from idling the Titan plant in Trinidad, and management's guidance points to lower prices and EBITDA in Q3 — a sharp reversal that tempers the blowout results.
At the time of this filing, MEOH was trading at $53.99 on NASDAQ in the Industrial Applications And Services sector, with a market capitalization of approximately $4.1B. The 52-week trading range was $32.00 to $66.75. This filing was assessed with positive market sentiment and an importance score of 9 out of 10.