Page 15 - LatAmOil Week 18 2020.pdf

LatAmOil
NEWS IN BRIEF
LatAmOil
PETROCHEMICALS
Methanex reports Q1-2020 results
For the first quarter of 2020, Methanex reported net income attributable to Methanex share- holders of $23mn ($0.21 net income per com- mon share on a diluted basis) compared to net income of $9mn ($0.12 net income per common share on a diluted basis) in the fourth quarter of 2019. Adjusted EBITDA for the first quarter of 2020 was $138mn and Adjusted net income was $8mn ($0.10 Adjusted net income per common share). This compares with Adjusted EBITDA of $136mn and Adjusted net income of $10mn ($0.13 Adjusted net income per common share) for the fourth quarter of 2019.
In the first quarter of 2020, we estimate that global methanol demand declined by approx- imately 7% compared to the fourth quarter of 2019. The decline was due to impacts from the COVID-19 pandemic combined with a sharply lower oil price environment.
The Adjusted EBITDA we recorded in the first quarter of 2020 was similar to the fourth quarter of 2019 and reflects a higher average realized price, partially offset by slightly lower sales volume of Methanex-produced metha- nol. In addition, the Company’s fourth quarter 2019 Adjusted EBITDA results benefited from a $25mn insurance recovery, reflecting our 50% share in the Egypt facility, associated with the production outage experienced in Egypt in 2019. Adjusted EBITDA for the first quarter of 2020 includes an additional $5mn insurance recovery for the final settlement, reflecting our 50% share in the Egypt facility.
John Floren, President and CEO of Meth- anex, commented: “We are navigating extraor- dinary times as the COVID-19 pandemic has created unprecedented turmoil and uncertainty in people’s lives and in the global economy. Our number one priority is the safety of our employ- ees, contractors and communities where we do business. Fortunately, our team is safe and healthy.
“Our manufacturing operations have not been impacted by local government restrictions and we are able to operate in all of our plant loca- tions. We have moved to minimum staffing lev- els at our manufacturing sites and the majority of our employees are working remotely. Our opera- tions and global supply chain are running effec- tively and have not been significantly impacted by COVID-19.
“I want to thank our team members around the world for their tremendous dedication and agility. I am incredibly proud of our team who are safely producing methanol, with a limited number of people on site, and managing our
global supply chain to deliver secure and reli- able supply to our customers, mostly working remotely.”
“Given the considerable uncertainty we face, we are planning for a wide range of scenarios, including ones in which we see a deeper and more prolonged reduction in methanol demand and low prices, while positioning ourselves to deliver long-term value when global markets recover. We have taken a number of steps to protect our business in this environment: idled our Titan plant in Trinidad and Chile IV plant to respond to lower methanol demand; deferred approximately $500mn in capital spending on the Geismar 3 project for up to 18 months; reduced 2020 maintenance capital spending by $30mn; increased financial flexibility through a $436mn draw on our credit facilities; and reduced our quarterly dividend by 90%, which represents approximately $100mn in annualized cash savings.
“In addition, we are working with our bank- ing partners to obtain flexibility on certain financial covenants of our existing $300mn committed revolving credit facility and $800mn non-revolving construction facility. We have agreed on key parameters with our lead bank and are working with the other members of the bank syndicate to finalize these changes to the credit facilities, which is expected in the second half of May.
“We ended the quarter with a strong liquidity position of $823mn in cash on the balance sheet. We have no near-term debt maturities. As we navigate this challenging environment, we are focused on cash preservation and continue to evaluate all capital and operating spending.
“We expect methanol demand to be lower in the second quarter compared to the first quarter due to the impact of COVID-19 and a low oil price environment. It is not possible to accurately predict the degree of the impact at this stage as the full extent and duration of the COVID-19
pandemic and low oil price environment is uncertain.
“We anticipate that the coming months will be challenging and expect the negative impact of COVID-19 and low oil prices will be signifi- cant in the second quarter of 2020. As a result, we expect our financial results in the second quarter will be lower than the first quarter. We remain focused on operating our plants safely and reli- ably, delivering secure and reliable supply to our customers and protecting our balance sheet dur- ingthisveryuncertaintime.”
Methanex, May 05 2020
INVESTMENT
Petrobras comments on Gaspetro’s divestment
Petrobras, following up on the press release dis- closed on March 18 , 2020, regarding the sale of its entire 51% stake in Petrobras Gás (Gaspetro), informs the reopening of the analysis and qual- ification phase for potential buyers, which will extend until May 15, 2020.
The adjusted teaser is available on Petrobras’ website. The main subsequent stages of the pro- ject will be reported to the market in due time.
Gaspetro is a holding company with equity interests in several natural gas distribution com- panies, located in all regions of Brazil. In 2019, the total volume of gas distributed was 29mn cubic metres per day, serving about 500,000 cus- tomers through a distribution network of more than 10,000 km of gas pipelines.
Its corporate structure is formed by Petro- bras, Its corporate structure is formed by Petro- bras, with 51% of the shares, and Mitsui Gás e Energia do Brasil Ltda., which holds the remain- ing 49% of the shares.
Petrobras, May 04 2020
Week 18 07•May•2020
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