OCI (OCI) Q3 2024 TU earnings summary

Executive summary

• Major divestments in 2024 included sales of Methanol, IFCo, Fertiglobe, and Clean Ammonia businesses, generating up to $11.6 billion in gross proceeds and transforming the business profile.

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

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

• A tragic incident at the Beaumont Clean Ammonia Facility resulted in a subcontractor fatality, prompting a renewed commitment to safety.

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

Financial highlights

• Adjusted EBITDA from continuing operations posted a slight loss in Q3 2024, similar to Q3 2023, as higher sales volumes were offset by increased costs and lower margins.

• Net cash from continuing operations was $1.86 billion as of 30 September 2024, swinging from net debt of $2.19 billion at 30 June 2024, driven by asset sale proceeds.

• $1.02 billion of short-term debt repaid in Q3 2024; $698 million 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

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

• Further extraordinary distribution of about $1 billion planned for H1 2025, subject to transaction progress and strategic review.

• Corporate cost base being right-sized, with expectations to beat the $30–40 million run-rate target by 2025.

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