Methanex Corporation (NASDAQ:MEOH) Q3 2024 Earnings Call Transcript November 7, 2024 11:00 AM ET
Company Participants
Sarah Herriott - Director of Investor Relations
Rich Sumner - President and Chief Executive Officer
Conference Call Participants
James Cannon - UBS
Joel Jackson - BMO Capital Markets
Steve Hansen - Raymond James
Hassan Ahmed - Alembic Global
Matthew Blair - TPH
Roger Spitz - Bank of America
Operator
Good morning. My name is Pam, and I will be your conference operator today. At this time, I would like to welcome everyone to the Methanex Corporation 2024 Third Quarter Results Conference Call. [Operator Instructions] Thank you. I would now like to turn the conference call over to the Director of Investor Relations at Methanex, Ms. Sarah Herriott. Please go ahead, Ms. Herriott.
Sarah Herriott
Good morning, everyone. Welcome to our third quarter 2024 results conference call. Our 2024 third quarter news release, management discussion, and analysis may differ materially from the actual outcome. Certain material factors or assumptions were applied in drawing the conclusions or making the forecast or projections, which are included in the forward-looking information. Please refer to our third quarter 2024 MD&A and our 2023 annual report information. I would also like to caution our listeners that any projections provided today regarding Methanex’s future financial performance are effective as of today’s date.
It is our policy not to comment on or update the guidance between quarters. For clarification, any references to revenue, EBITDA, adjusted EBITDA, cash flow, adjusted income, adjusted earnings per share made in today’s remarks reflect our 63.1% economic interest in the Atlas facility, our 50% economic interest in the Egypt facility, and our 60% interest in Water Tripping. These exclude the mark-to-market impact on fair value creation and the impact of certain items. If you report our adjusted data, adjusted net income is associated with specific items. These items are non-GAAP measures and ratios not standardized or prescribed by GAAP and therefore are less comparable to similar measures presented by other companies. We report GAAP measures in this way because we believe they better reflect underlying performance, and we encourage analysts covering the company to report their estimates in this manner. I will now turn the call over to Methanex’s President and CEO, Mr. Rich Sumner, and then we will have a question and answer period.
Rich Sumner
Thank you, Sarah, and good morning, everyone. We are beginning today as we discuss our third quarter 2024 results. Our third quarter average price of $356 per ton produced sales of approximately 1.4 million tons generated adjusted EBITDA of $216 million and adjusted net income of $1.21 per share. Adjusted EBITDA was higher than the second quarter of 2024 primarily due to the gas sales, and I am proud of the team for taking a safety and reliability-based approach to ramping up G3 to operate at full rates for the long term. Now turning to the third quarter methanol pricing and market dynamics. Our third quarter global average realized price was $356 per metric ton, $4 higher than the previous quarter. Global methanol demand was stable in the third quarter compared to the second quarter, with relatively flat demand into chemical applications and seasonally higher demand for energy applications such as MTBE and fuel blending. Methanol to Olefins operating rates decreased at the beginning of the quarter due to seasonal maintenance as well as tight supply availability, and operating rates increased throughout the quarter as supply improved. Methanol inventories gradually rebuilt. By the end of the quarter, the MTO industry was operating at around 90% operating rates.