OCI N.V. Reports H1 2017 Adjusted EBITDA of $316 Million and Adjusted Net Income of $47 Million
Summary of Consolidated Results for H1 2017:
Statement from the Chief Executive Officer – Nassef Sawiris:
“We achieved once again record production volumes during the first half of this year, despite some unplanned shutdowns in the second quarter. Going forward, we expect another step-up in volumes and anticipate all our operations to reach normalized run-rates in the fourth quarter this year, now that Iowa is up and running and our ammonia operations in Egypt have resumed production at high utilization. Natgasoline will give a further boost in 2018. With these additions our portfolio is becoming increasingly diversified, both product-wise and geographically.
Our end markets for commodity fertilizers continued to be volatile during the first half of the year, with urea and ammonia prices dropping to unsustainably multi-year low levels in June. A tighter supply and demand balance and lower inventories across the globe than the same time last year have resulted in a partial rebound in urea prices since June despite the usual seasonal summer slowdown. In the third quarter so far, urea prices are at higher levels than the same time last year and ammonia prices have also started to recover in recent weeks.
Prices for our other products have been less volatile. Prices for CAN, our main nitrates business in Europe, have moved upwards in the past few months to levels higher than last summer. Our methanol business in both the United States and Europe is benefiting from significantly higher prices than last year. Melamine prices have continued an upwards path in 2017, increasing for the second year in a row.
Irrespective of our underlying end markets, our expanded portfolio is capable of superior cash conversion and weathering trough conditions. OCI is one of the lowest-cost producers globally and we have become more efficient with the first benefits from our cost savings program, launched in the fourth quarter last year, starting to positively impact our results. Furthermore, OCI has no further commitments for growth capex, other than for the doubling of our methanol capacity at BioMCN. Preliminary estimates for the project costs are approximately €100 million and we expect to start commissioning in the fourth quarter of 2018. We remain focused on achieving rapid deleveraging, buoyed by a significant step-up in capacity, low capex and operational cash flows.
Last week’s Hurricane Harvey had a devastating effect on Texas. The storms passed over both OCI Beaumont and the Natgasoline site. The safety of our staff and our community is our number one priority and I would like to thank all our employees for their commitment during this difficult period, some of whom suffered flooding at their homes. We are fortunate that the storm caused only minor disruptions, except for a few days shutdown. Our thoughts and prayers are with all those affected and we have made a donation to the Southeast Texas Emergency Relief Fund to help in the relief and recovery efforts for local families. We will continue to monitor the situation and provide our support in any way that we can, including several initiatives currently underway to help our local staff with housing and supplies.”
Date: Wednesday 6th September
Time: 4:00 PM CEST (3:00 PM BST, 10:00 AM ET)
The dial-in numbers for the conference call are:
Standard International: +44 (0) 1452 557851
United Kingdom: 0800 2795982
Netherlands: +31 20 7139280
United States: 1 (866) 6654042
Conference ID: 80604264
A conference call replay will be available from 18:30 BST Wednesday 6th September until 4th October 2017.
The replay access numbers are:
Standard International: +44 (0) 1452 550 000
Netherlands: 08000 234 610
United States: 1 (866) 247 4222
Conference ID: 80604264