OCI (OCI) Q3 2024 TU earnings summary

Executive summary

• Major divestments in 2024 included Methanol to Methanex ($2.05B), IFCO to Koch ($3.6B), Fertiglobe to ADNOC ($3.62B), and Clean Ammonia to Woodside ($2.35B), generating gross proceeds of ~$11.6B and transforming the business profile.

• Leadership changes saw Hassan Badrawi appointed CEO and Beshoy Guirguis as CFO, with a focus on strategic transformation.

• Continuing Operations now comprise European Nitrogen and Corporate Entities, with Methanol and other divested assets classified as Discontinued Operations.

• Safety remains a top priority following a fatal incident at the Beaumont Clean Ammonia Facility in October 2024.

• Interim extraordinary distribution of €14.50/share (~$3.3B) scheduled for 14 Nov 2024, with total shareholder distributions over four years reaching $5.4B.

Financial highlights

• Adjusted EBITDA from Continuing Operations posted a slight loss in Q3 2024, similar to the prior year, as higher sales volumes were offset by increased costs and lower margins.

• Net cash position reached $1.86B at 30 Sep 2024, a swing from $2.19B net debt at 30 Jun 2024, mainly due to asset sale proceeds.

• $1.02B in short-term debt repaid in Q3 2024; $698M of 2025 Senior Secured Notes redeemed in October 2024.

• Discontinued Operations (Methanol, IFCO, Fertiglobe, Clean Ammonia) saw improved adjusted EBITDA year-over-year, driven by higher prices and lower gas costs.

Outlook and guidance

• Further extraordinary shareholder distribution of ~$1B is planned for H1 2025, subject to transaction progress and strategic review.

• Clean Ammonia project remains on track for 2025 start-up, with total expected spend of ~$1.55B.

• Corporate cost base is being reduced, with expectations to beat the $30–40M run-rate target by 2025.

• Strategic review ongoing to evaluate alternatives for continuing businesses, including European Nitrogen assets.