OCI Global Q3 2024 Trading Update

AMSTERDAM, Nov. 12, 2024 /PRNewswire/ -- OCI Global reports Q3 2024 trading update.

Hassan Badrawi, CEO of OCI Global:

"During the course of the third quarter and the quarter to date, OCI has achieved significant milestones in its strategic transformation. We announced the sale of OCI Methanol to Methanex for a consideration of USD 2.05 billion, and successively closed the sales of IFCo to Koch Industries for USD 3.6 billion, Fertiglobe to ADNOC for USD 3.62 billion, and Clean Ammonia to Woodside for USD 2.35 billion. These are remarkable achievements for the OCI team, further demonstrating our execution capabilities and our commitment to OCI's strategic roadmap for value creation. We believe these transactions provide highly valuable liquidity for significant capital returns to shareholders as a priority, alongside future investment capacity.

Following these milestones, OCI will pay an interim extraordinary distribution of EUR 14.50 per share in aggregate (~USD 3.3 billion) on 14 November 2024 to shareholders of record as of the close of business on 29 October 2024. The distribution will be made as a repayment of capital or, at the election of the shareholder, as a payment from the profit reserve. This brings total distributions to OCI shareholders in the past four years to USD 5.4 billion. Looking back at our history as a listed vehicle since 1999, OCI has returned more than USD 20 billion to its shareholders via buybacks, share and cash distributions, representing an IRR of approximately 40%. We will continue to build upon this track record and seek to deliver sustainable value creation for our shareholders, partners and employees.

OCI expects to make an estimated further extraordinary distribution of approximately USD 1 billion through a repayment of capital during H1 2025. This will be subject to continued progress on the execution of the announced transactions and the strategic review.

Finally, we were deeply impacted by the tragic incident in early October at the Beaumont Clean Ammonia site, which resulted in the death of a subcontractor. The safety and well-being of all employees and contractor employees is of paramount importance to OCI, and we are cooperating fully with the local authorities to investigate and understand the circumstances regarding the incident. Our thoughts and deepest condolences remain with our colleague's family, friends, and local communities."

Key Financial Highlights

Continuing Operations Adjusted EBITDA for Q3 2024, which now solely includes European Nitrogen and Corporate Entities, showed a similar small loss to Q3 2023:

Notwithstanding improved sales volumes, margins at European Nitrogen were negatively impacted by higher natural gas pricing, higher EUA provisions and other costs.

The weaker comparative performance within European Nitrogen was partially offset by lower Group costs and eliminations.

Given the recent divestments, the current corporate cost base of Continuing Operations does not yet fully reflect the reduced scope and scale of OCIs continuing business. OCI continues to make substantial progress in right-sizing its corporate cost base to better serve the current structure and scale of the business. OCI expects to beat its previously guided target of USD 30 - 40 million of run-rate corporate costs by 2025.

Within Discontinued Operations, adjusted EBITDA for OCI's Methanol business showed a marked improvement year-on-year reflecting increased methanol and ammonia prices, reduced natural gas costs, and robust operational performance.

Net cash from Continuing Operations stood at USD 1,855 million as of 30 September 2024 compared to a net debt position of USD 2,194 million as of 30 June 2024[1]. The end-Q3 net cash position precedes closing of the Fertiglobe transaction and payment of the announced EUR 14.50 extraordinary distribution.

Key Strategic and Business Highlights

Effective 15 October 2024, Mr. Hassan Badrawi was appointed Chief Executive Officer (CEO) of OCI, previously OCI's Chief Financial Officer (CFO) and a 23-year OCI veteran. Mr. Beshoy Guirguis assumed the role of CFO of OCI, formerly OCI's Vice President of Global Growth and Transformation, and CFO of OCI US ...