Methanex Corporation Q2 FY2025 earnings call

• President and CEO Rich Sumner discussed Q2 results, acquisition of OCI's methanol business, methanol market conditions including demand and supply, operations at various facilities like Geismar, Chile, New Zealand, Egypt, and financial position with cash and credit facility. • Discussed integration of OCI assets, operating rates of G3 Beaumont, ammonia business outlook, gas hedging for new assets, and integration priorities for OCI. • Mentioned monitoring of market conditions like China's actions on stock facilities and Iran's shipping and production.

Second quarter average realized price $374 per tonne, produced sales ~1.5 million tons, adjusted EBITDA $183 million, adjusted net income $0.97 per share. Acquisition of OCI's methanol business strengthens production portfolio. Methanol production in Q2 similar to Q1 with variations by region. Geismar production higher, Chile plants operated at capacity then idled for maintenance, New Zealand had lower production due to gas redirection, Egypt had curtailments. Expected equity production guidance for 2025 ~8 million tonnes.

• Expect higher adjusted EBITDA in third quarter 2025 compared to second quarter. • Priorities for second half of 2025 include safe and reliable operation and smooth integration of new assets. • Top capital allocation priority is to direct free cash flow to deleveraging via repaying Term Loan A facility. • Do not anticipate significant growth capital over next few years. • Production and sales of produced product to more fully reflect run rate capacity.

• Risks associated with forward-looking information subject to uncertainties. • Secondary sanctions on Iran and potential impact on trade flow and methanol supply from Iran. • Gas supply challenges in New Zealand and other regions affecting production. • Market dynamics and unplanned outages impacting production and financial performance.

Q: On operating rates at G3 Beaumont and OCI, talk about G3 running over 90% since restart and how Beaumont and Nat gas have been running.

A: G3 has operated at very high rates above 90% since restart, Beaumont and Natgasoline assets have run at full rates since acquisition.

Q: When OCI deal was announced, guidance was down $50M, what's the reason?

A: Mainly due to bringing down New Zealand production by 600,000 tonnes.

Q: Outlook for ammonia market and operations expansion?

A: Early in ammonia, market was tight, pricing rebalanced, ammonia represents ~3%-5% of global sales, need to understand operations and integrate.

Q: Gas hedging associated with new OCI assets?

A: Hedging strategy in North America is to be meaningfully hedged in short term, target 50%-70% hedged in first 3 years, stagger down later, comfortable with current hedge level.

Q: How much quarterly depreciation rises with OCI acquisition?

A: Approximately $25 million per quarter inclusive of Natgasoline joint venture.

Q: On salvage value and monetization of certain plants?

A: Value depends on gas stock and feedstock availability, option value in place, relocation value depends on speed, not in $15-20 per share value now.

Q: Impact of secondary sanctions on Iran trade flow?

A: Iran has avoided sanctions via shadow fleet, monitor shipping and operations.

Q: Integration priorities for OCI?

A: Ensure safe reliable operations, connect systems and processes, target $30M synergies including logistics costs, continue improving operations.

Q: Monitoring China's action on stock facilities?

A: Monitoring closely, methanol industry not overbuilt, rebalancing in olefins market positive.

Q: Iran shipping and supply impact?

A: Watch closely, shadow fleet used, enough capacity today but monitor.

Q: Natgasoline debt accounting?

A: Natgasoline debt assumed in modeling, hidden in investment and associate line on balance sheet.

Q: New Zealand production assumptions?

A: Took down 600,000 tonnes to 400,000, gas profile deteriorated, government trying to address, optimize operations.

Q: Consider putting out OCI methanol sales and EBITDA?

A: Will take feedback and ensure investment community understands impact on earnings.

Q: Impact of OCI acquisition on realized net price discount?

A: Focus on realized pricing, OCI business sells in Atlantic markets, may move average discount up but improve portfolio.

Q: Reason for rising discounts in Atlantic Basin?

A: More Atlantic production, rise in shipping costs, competition in market led to expansion in discounts.