OCI (OCI) Q2 2024 earnings summary

Executive summary

• Entered binding agreement to sell 100% of Clean Ammonia project in Beaumont, Texas to Woodside Energy for $2.35 billion, with closing expected in H2 2024 and final payment at project completion in H2 2025.

• Q2 2024 revenue was $1,211 million, down 12% year-over-year, mainly due to lower nitrogen prices, higher Middle East gas costs, and a planned Natgasoline shutdown, partially offset by strong asset utilization and lower global gas prices.

• Adjusted EBITDA for Q2 2024 was $296 million, down 9% year-over-year; continuing operations adjusted EBITDA improved to $54 million from $5 million in Q2 2023.

• Strategic divestments of Fertiglobe and IFCO are progressing, with extraordinary shareholder distributions of at least $3 billion planned upon closing.

• Operational excellence drove asset utilization rates above 90% at key facilities, supporting improved sales volumes and margins.

Financial highlights

• Q2 2024 net revenue from continuing operations: $495 million, down 4% year-over-year; total revenue: $716 million, down 16%.

• Adjusted EBITDA from continuing operations: $54 million, up from $33 million in Q2 2023; total adjusted EBITDA: $80 million.

• Net loss attributable to shareholders: $(15.8) million, compared to $(90.4) million in Q2 2023.

• Free cash flow from total operations was $108 million; net debt stood at $3,911 million with a consolidated net leverage of 3.4x trailing 12-month adjusted EBITDA.

• Maintenance capital expenditure for Q2 2024 was $14 million for continuing operations.

Outlook and guidance

• Methanol pricing expected to benefit from accelerating demand and tightening supply, with regulatory-driven growth in green methanol for marine and road fuels.

• Ammonia and nitrogen markets supported by robust demand, limited new capacity, and environmental focus driving shift to blue/green ammonia.

• Texas Blue Clean Ammonia project remains on track for 2025 start-up, with $650 million spent as of June 2024 and potential for future expansion.

• OCI reaffirms its corporate cost run-rate target of $30–40 million by 2025.