Financial Performance - Revenue for 2023 was 3,723million,adecreasefrom4,311 million in 2022[17] - Net income attributable to Methanex shareholders in 2023 was 174million,downfrom354 million in 2022[17] - Adjusted EBITDA for 2023 was 622million,comparedto932 million in 2022[17] - Methanex generated 622millioninadjustedEBITDAand2.25 in adjusted net income per share in 2023[30] - Adjusted EBITDA for 2023 was 622million,adecreaseof310 million compared to 932millionin2022[96][103]−NetincomeattributabletoMethanexshareholdersfor2023was174 million (2.57pershare),downfrom354 million (4.86pershare)in2022[95]−Revenuefor2023was3.7 billion, a decrease from 4.3billionin2022,primarilyduetoloweraveragerealizedprices[99]−Averagerealizedpriceformethanolin2023was333 per tonne, down from 397pertonnein2022,decreasingAdjustedEBITDAby657 million[101][105] - Methanol sales volume (excluding commission sales) increased to 10.0 million tonnes in 2023 from 9.8 million tonnes in 2022, increasing Adjusted EBITDA by 16million[106]−TotalcashcostsincreasedAdjustedEBITDAby331 million in 2023 compared to 2022, driven by lower Methanex-produced methanol costs (199million)andpurchasedmethanolcosts(207 million)[111] - Methanex-produced methanol costs decreased by 199millionin2023duetochangesinrealizedmethanolprices,spotgasprices,andinventorytiming[112]−TheproportionofMethanex−producedmethanolsalesincreasedin2023,decreasingcostsandincreasingAdjustedEBITDAby18 million[113] - Purchased methanol costs decreased by 207millionin2023duetolowermethanolpricesandtimingofinventoryflows[114]−Logisticscostsincreasedby18 million in 2023 compared to 2022, primarily due to production mix and longer supply routes, impacting Adjusted EBITDA[115] - The Egypt gas redirection and sale proceeds contributed 58milliontoAdjustedEBITDAin2022,whichdidnotrecurin2023[116]−Othercostsincreasedby17 million in 2023 compared to 2022, mainly due to the start-up costs of the Geismar 3 plant[117] - The mark-to-market impact of share-based compensation was 16millionin2023,comparedto171 million in 2022, driven by changes in the company's share price[119][124] - Depreciation and amortization increased to 392millionin2023from372 million in 2022, driven by higher costs of depreciable assets and ocean-going vessel additions[125] - Finance costs decreased to 117millionin2023from131 million in 2022, primarily due to higher capitalized interest related to the Geismar 3 project[126] - Finance income and other increased to 40millionin2023from25 million in 2022, primarily due to higher interest income[127] - The effective tax rate based on Adjusted net income was 23% in 2023, compared to 29% in 2022, reflecting changes in earnings distribution and foreign exchange impacts[130] - Cash flows from operating activities decreased to 660millionin2023from987 million in 2022, primarily due to lower earnings and changes in non-cash working capital[133] - Net income before income tax was 286millionin2023,comparedto582 million in 2022, with an income tax expense of 2millionin2023and120 million in 2022[128] - Non-cash working capital changes decreased cash flows from operating activities by 59millionin2023,comparedtoanincreaseof54 million in 2022[135] - Trade and other receivables increased by 33millionin2023,reducingoperatingcashflowsduetotimingofinvoicesandpayments[135]−Inventoriesdecreased,increasingoperatingcashflowsby16 million in 2023 due to lower methanol prices impacting natural gas costs[135] - Accounts payable and accrued liabilities decreased by 23millionin2023,reducingoperatingcashflowsduetolowergasandmethanolprices[135]−Thecompanyrepurchased1,894,711commonsharesfor86 million in 2023, compared to 5,551,751 shares for 253millionin2022[136]−Totaldividendpaymentsin2023were49 million, with quarterly dividends increasing from 0.175to0.185 per share in April 2023[136] - Capital expenditures for consolidated operations were 178millionin2023,primarilyforplannedturnaroundsinGeismar,NewZealand,andChile[139]−TheGeismar3projectincurred270 million in capital expenditures in 2023, with total capital costs expected to not exceed 1.3billion[139][151]−Totalliquiditydecreasedto758 million in 2023 from 1.458billionin2022,withcashandcashequivalentsat458 million[141] - The company plans to repay a 300millionbonddueattheendof2024,prioritizingexcesscashforthisrepayment[140]−Thecompany′sfinancialassetsmeasuredatfairvaluedecreasedfrom323 million in 2022 to 121millionin2023,primarilyduetoadeclineinderivativeinstrumentsdesignatedascashflowhedges[169]−Cashandcashequivalentsdecreasedsignificantlyfrom858 million in 2022 to 458millionin2023[169]−Totalfinancialliabilitiesincreasedfrom3,715 million in 2022 to 3,806millionin2023,drivenbyhighertradepayablesandleaseobligations[169]−AsofDecember31,2023,thecompanyhadacashbalanceof458 million and an undrawn 300millionrevolvingcreditfacilityexpiringinJuly2026[196]−Long−termdebtobligationsinclude1,986 million in unsecured notes and 156millionrelatedtolimitedrecoursedebtforocean−goingvessels[197]−Thecompanyfacesliquidityrisks,withnoassuranceofsufficientfundingforfuturecapitalprojectswithoutincurringadditionaldebt[200]ProductionandSales−Totalsalesvolumein2023was11,169thousandtonnes,upfrom10,774thousandtonnesin2022[17]−Methanexproduced6.6milliontonnesofmethanolin2023,anincreaseofapproximately0.5milliontonnescomparedto2022[26]−Methanex′saveragerealizedmethanolpricein2023was333 per tonne, compared to 397pertonnein2022[61]−Methanex′stotalannualoperatingcapacity,includinginterestsinjointlyownedplants,iscurrently9.3milliontonnes[48]−Methanex′s2023salesvolumeof11.2milliontonnesofmethanolrepresentedapproximately12458 million in cash and $300 million of undrawn backup liquidity, enabling full funding of the Geismar 3 project with cash on hand[75] - The company expects its new 1.8 million tonne Geismar 3 facility in Louisiana to reach commercial production in 2024, contributing to increased supply[184] Risk Management - Methanex's enterprise risk management program has been further matured in 2023, with greater emphasis on explicit risk management discussions and analyses[38] - Methanex's Board and senior management have integrated risk management discussions into the corporate strategy process, aiming for enhanced assessment of material risks and a more comprehensive discussion of risk appetite[38] - The company is exposed to macroeconomic risks, including potential impacts from pandemics, global economic downturns, and inflationary pressures, which could negatively affect methanol demand and prices[185][187] - The company operates in multiple jurisdictions, exposing it to risks such as expropriation, political instability, and changes in laws or policies that could adversely affect its operations[189] - Methanol produced in sanctioned countries may create competitive price pressure, potentially impacting the company's operations and financial condition[193] - The company is subject to taxation risks in multiple jurisdictions, with potential adverse impacts from new taxes or rate increases[194] - Foreign operations are organized based on tax law assumptions, but changes in foreign tax laws could lead to adverse financial consequences[195] - Foreign currency risk is significant, with exposure to fluctuations in currencies such as the Canadian dollar, Chinese yuan, and euro, impacting costs and revenues[201] Operational Costs and Efficiency - The company's production facilities outside North America are supported by natural gas purchase agreements linked to methanol prices, ensuring competitiveness throughout the methanol price cycle[69] - In North America, the company has fixed price contracts and hedges targeting a minimum operating rate of approximately 70% in the near term, with remaining gas requirements purchased through the spot market[70] - Distribution costs, including ocean shipping, in-market storage, and distribution, are a significant component of total operating costs, with efforts focused on cost reduction through optimized shipping fleet use and geographic product exchanges[71]
Methanex(MEOH)2024-03-08 22:24