MEOH - Earnings call transcript Q2 2021

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Methanex Corporation Q2 2021 Earnings Call. I would now like to turn the conference over to Ms. Kim Campbell. Please go ahead, Ms. Campbell.

Kim Campbell

to Quarter Welcome Call. Results everyone. morning, our XXXX Second Conference Good

differ tab Relations XXXX management's Methanex.com. any our that the be statements XXXX projections were Reports included information. release, quarter I not more accessed our future the and in our the Report today's Our remind caution in drawing policy to news our financial answers financial the like This to would and quarters. nature MD&A to making discussion its to guidance on are between forward-looking listeners risks from like date. for information second our effective uncertainties website performance on stated to Methanex's would which quarter may to page materially is our questions also and conclusions the may second provided analysis, to today outcome. factors your and assumptions of and Annual information. to from actual update by comments XXXX of our at Investor or are as listeners or contain that forecasts information. today cause that Certain forward-looking the or can subject outcome material I the this applied refer regarding is or comment It Please projections

in or references For interest adjusted facility in Atlas made income flow Egypt remarks our revenue, facility. today's in clarification our XX% cash the to economic the any EBITDA, economic and reflect XX.X% EBITDA, interest

certain meaning GAAP the comparable company items over the not in companies. manner. Mr. now performance measures this to identified in estimates be we compensation to make President covering presented and this do other non-GAAP period. exclude have way to non-GAAP his Methanex's underlying and and items net therefore operating report to them answer of I to for share-based mark-to-market and our that these call question any the impact and EBITDA and and adjusted In turn unlikely measure encourage impact specific are on by to better measures standardized We events. comments CEO, associated similar with of report their by prescribed are adjusted addition, we a analysts These the to Floren report would measures a John income like

John Floren

second Good Thanks, financial Today, results. I'm Kim. morning, to quarter excellent pleased our discuss everyone. XXXX

our regarding restart on In questions. allocation, We third our the announcement project, shipping discuss will and we the the strategic markets, our entering our make quarterly increase our addition, share would call of the X operational quarter. view recent Then to for and methanol your our outlook our decision up construction will few Geismar remarks also partnership, priorities including review we capital dividend. open a to around results the

increased results. million $XXX Turning $XX an $XX realized a the quarter. our in tonne, to average in per quarter, quarter increased the to first financial the increase first increase to to Adjusted our EBITDA price $XXX quarter. second compared of second We the million to compared

income increase earnings net results These first $X.XX in the quarter, per million prices. second the million leverage of illustrate of adjusted recorded We significant the quarter. an to per $XX $X.XX higher also that to compared or our methanol or share $XX share have

Now market. turning the to methanol

recovery constructive the tonne EURXXX supply capacity and $XXX demand, our additions curve increased price methanol quarter. economic we in industry in gas dynamics to quarter, methanol coal by to strong demand a prices favorable, this combined supported the methanol and set which of methanol prices tonne. natural that worldwide. estimate world Pacific. months, market that to challenges North supply new methanol industry delayed the last supported are the the year. have global as level We per global supported price inventory August We anticipate per Current quarterly continues the start-up pre-pandemic European rollout price has ongoing and higher and prices. remained and $XXX $XXX We first methanol our the set and XX global in We surpass conditions Strong quarter industry recently America industry posted with industry that approximately estimate energy in per China vaccines our second X% rising into compared environment. or challenges, demand, will rebounded continuing approximately cost later posted at demand second levels, around tonne, Over by the with prices demand $XXX global low ongoing quarter, approximately contract tonne by the is increased $XXX Asia per the third third tight quarter for

for for As mentioned new last review reviewed needed outlook over industry operating industry years. demand new timing comprehensive and supply term the is will meet growing the a completed the to plants methanol coming next medium over call of long-term additions, industry and the we medium on believe And months work we on in positive. that methanol that expectations methanol X be years. we outlook. We demand existing mid-July, industry our over growth, the industry Based rates capacity new few for to our the

results. operational our to turning Now

than second and lower the XXXX the ongoing the in due was first the to quarter lower million to to primarily deliveries. New in quarter was lower availability In first production Our Chile. our second gas gas Zealand, due New quarter, production lower quarter compared tonnes of X.X Zealand

available make market. with New Zealand Genesis we electricity commercial to natural addition, tight In agreed to short-term a a gas to support arrangement Energy

of for Motunui As result, our plants one approximately idled temporarily X we a months.

gas margin of sale estimate improve could completing several loss over the projects gas as Zealand our gas availability Geismar of higher will be quarter New planned X at upstream in lower was late Geismar coming first production from from the at the work We the the years. in X of Geismar margin a the offset, turnaround the the of million production expect that development for tonnes. plant tonnes. at We X.X sector volume XXXX the Geismar forecasted The project field that XX,XXX our in first is finished second we facility plant We production second our XXXX, completed the quarter our quarter. debottlenecking X completed in in XXXX. than following the quarter In

typically approximately production current that the As in of second production second nearly We for resolved. in operating tonnes first to million deliveries. costs annual per we our X.X operating basis, lower receive for capacity as full was in on to slightly In minor tonnes. In capital the a XX%. due the our quarter. the in In as the first for and XXX,XXX quarter we Southern for the our lower impacting the XXX,XXX In an rates. the facilities of estimate result, first than million been our the gas delivery, an as was issues XXXX similar to lower fourth in production the quarter is full quarter first now in addition quarter were Geismar production quarters. higher months on be Methanex's quarter, of gas second tonne Trinidad have that Medicine technical deliveries than quarter We be was increase Chile was reflecting to ran experience tonnes higher expected, than Hat, Trinidad deliveries $XXX and in should Hemisphere XXX,XXX at X.X Completed production the quarter we our interest. winter quarter second gas to our second estimate Chile, Egypt, equity received gas Based capacity. plant XXXX for tonnes, tonnes in third our production

Now sheet. to balance our turning

We reflects EBITDA with previously our sheet have quarter in partnership, construction million the the of our million impact a cash strong O.S.K. drawn transaction quarter. adjusted the or a announced position $XXX will results strong our the our end with XXXX. end on second $XXX on amount over at MOL, material partnership proceeds on facility. have the earnings. GX the of by Limited a of This Mitsui expected strategic not million This second We've of shipping financial and with repayment in $XXX balance

Our subsidiary methanol third-party Methanex revenue and to from Waterfront generates arrangements. backhaul Shipping shipping customers

MOL fluctuate a which entitled of market volume net tanker and Waterfront result rates. proportional of partnership share ship will the on earnings, be a based As to

terms basis resulting consolidated our after ownership and statements transaction in now Waterfront on revenues financial of a for financial our this in Shipping XXX% a of accounted in the our of is being However statements. complete, included expenses is and

an million revolving across backup undrawn and $XXX credit generate continue have We construction liquidity, of a methanol prices facility. meaningful our including million wide facility $XXX to our and GX cash range flow

capital significant returns. of project, supply this that our Now low to X our abundant We enhance a cost the turning project. our to and project the US that restart production Board operating pleased of were X Geismar construction gas project announce project. underpins unique cost natural advantages unanimously with approved the the An in for Geismar

In we industry. shareholders. X that improve value substantially that estimate emission future the will generation in one will Geismar GX will deliver significant capability. We of the lowest portfolio our Ultimately and have profiles our COX believe strengthen our intensity asset to addition, X long-term cash Geismar

the end billion, committed and around, be as the for we period. care the to of Our that to as XXXX at we capital approximately is QX $X.XX $X.XX billion the will cost $XXX end, project million estimate project through expect maintenance

October in $XXX to million expect XXXX. remaining capital We cost million resuming construction approximately after $XXX

confident our to time ability in on budget. and are We on project this complete

We last over months. risk XX project have the the substantially reduced profile execution

projects from are is ahead capital major construction well a in of our project positioned other the region. as We on labor perspective

bulk the budget our priorities. project. allowances turning the lastly, majority have risks for for And on the of and contingencies material also our and remaining escalation both prices allocation We capital costs, secured to our remaining includes

record cash, Our we maintain capital generate cash and continue accretive returning cash to the that business, remain same. growth the our value shareholders. priorities of pursue We strong our allocation to opportunities excess use

to cash sustainable in We shareholders. such increase years. our combined X levels significant on reduce more times as time have $XXX growth target on to Going is reset over only a will quarters lower will return increase approximately tonne to capital at to anticipate to cost or ways. buybacks, we XX.X distributions of few recently the share further plans shareholder vehicles per debt-to-EBITDA cents share approximately capital to our at of flexibility a capital per plus with flexible that remaining few the plan to methanol the emphasis as quarterly our hold prices such per in GX our over We during we dividend higher. hand, dividend the announced and buybacks $XXX And tonne ability for prices distribution that we Geismar We de-lever to three cash share. will of our $XXX in and of financial methanol leverage X increase construction. targeting $XXX targeting, target weighting we million a between tonne. debt a plan minimum on We forward, next

increase significant We cash expect and our capability our in that increase future potential. generation support GX a shareholder substantially distribution will

Now turning third the for the to outlook quarter.

of the anticipate second EBITDA to We We the the our expect in will quarter based be so similar to that third posted in methanol the to third production prices We forecast similar be quarter XXXX far. quarter. realize to will quarter. second similar results prices third the our our adjusted be quarter to quarter second on

published Force align sustainability Accounting reference is reported practice disclosures sustainability GRI. our best XXXX enhance wanted standards disclosure Global comparability. the support Financial for related that with to some greater recently marine requirements we year I aspects since chemical with Climate-Related Reporting Standards aligned or Disclosures transparency Annual Finally, to have our our Initiative of publicly Task or sectors. on transportation This reporting to of and SASB mention Board disclosure and TCFD and performance some Report, and our or ESG the and Also Sustainability Sustainability the continue we evolving the and our on to

will over to and We our questions. ways at to now performance happy look we answer continue the would sustainability can any be improve coming reporting that I years.

Operator

open. first James. go is your the line Hansen Steve is question [Operator And now ahead, Raymond from from Instructions]. Please

Steve Hansen

just moving specifically in asset John about and now effort think I refurbing the a plans reshuffling to a what just that two now getting guys. time that might some gone In region over give right lie starting for you've for IV, production you us you, about understand gas morning required just is all do we're recovery good the complex operation. through past the this Chile plant sense thinking any in mode I and Yeah, a done the for about But that COVID have forward. Chile minute. here But think where might where availability that pre-COVID. of then profile. it there Chile the of

John Floren

We're in last last has Chile profile Argentina in XX plant also months. the and the running XX Gas lot a improved in Yeah, right profile months. on our improved now has that gas the

our in Chile. third, late So Steve is by early plants running today fourth third both that we'll expectation quarter, the quarter, be

Steve Hansen

great. tonne very those might number, clarify, GX Okay, and just to you I are just, GX, That's per can two projects missed helpful. debottlenecking cited across metric now but that the Thanks. that just other complete. Any And cost the on projects the that the you portfolio? complete you now contemplating debottlenecking be the

John Floren

Yeah, methanol out looking to always we're [indiscernible]. of more existing get our

sense. we and lots ideas So look they make of have that we're if always, at execute

The for Geismar $XXX completing cost to are continuing we but today tonne. additional look debottleneck in other to nothing opportunities, Steve. per XXX,XXX the was for debottlenecking So report

Steve Hansen

jump I'll queue. the helpful, Very thanks, in

John Floren

Thanks, Steve.

Operator

The ahead, your Please from is open. you. question Ben next from now go is Scotiabank. line Thank Isaacson

Ben Isaacson

Thank you much. very

First GX, your on methanol markets, not? out changing question do so, depending what your changing? you that four on see each of you us restart sales grade future? operating over your go review And the the How whether major do year Asia given you in into conducted portfolio the of at the allocation market is, methanol impacting China as percentage or of in three the you or can GX sales update past the regional you or that see based to to

John Floren

to the earmarked and that the shared. Asia the calculations go we've economics in modeling for IRR GX Yes, done we've so we've that XXX% of to

changed. that hasn't So

published, fluid that the as So than if that place world attractive economics. We of obviously to some goes very situations already we and advantage and supply we're world. really even Atlantic Basin, as the our economics to to disclose may certain out balance of to different net-backs well do a in attractive more better supply product spot able arise what around where the the don't in our makes than move Ben that product and chain inventory. and It's chain our take optimize parts we've

really don't goes product what we So disclose where.

Ben Isaacson

the in freight my normal, talk how maybe the is, of versus Thank is active evolve? cost, you about just Methanex it and Waterfront, rates an is is you you. shipper into bearing And being freight is terms built discuss freight prices? an magnitude will the you it can or additional company, do who follow-up impacting market And an of I have the guess owner outlook of rates how

John Floren

liquid seeing Well, we wish container there dry were a lot higher, I'd I mean are markets great, despite what bulk in average prices. that still we're chemicals call what for tankers not and below

to competitive more and higher advantage think So prices our with prices we on make like a obviously we we'd higher because money we have shipping. see

of the dry and and seems seeing the tanker world there on the thing lots bulk be So containers. to that capacity same still is we're seeing in not world

Ben Isaacson

Great, thank you.

Operator

now your open. Please line is next you. John Thank ahead, The Roberts is UBS. from question from go

John Roberts

LyondellBasell their know? will up running, here acid can the Thank Is And market with plant. unit had back come acid they do you. yesterday acetic plant the you merchant acetic again? into an that methanol that get unfortunate until incident

John Floren

acid Yeah, unit. than they I have planned in turnaround information been the site understanding, that read, don't My the regarding I've what's and what more for operations. reported I were based about haven't acetic any on seen press in anything reported

I they more understand, was the that, it don't contractors So starting is the and entering any a their know unit. just John. than were turnaround were planned and why I what that's

John Roberts

Okay.

John Floren

safety there Leverkusen people can your and was off attention as another week it really take never the this And event. Yeah, ball process really other you all tragic in put I two the that we've I illustrates because well Germany where on event agree. in safety, eye and were A think killed.

So events. really tragic

John Roberts

in assume options since your do there. eventual you the Waitara longer-term gas an you, other And before you think you do outlook, outlook term updated Titan Valley longer about the equipment constrained you long restart then wait term restart your plants, or industry just or did you what that's how assume did eventual for longer at for

John Floren

put those two but over full that restarted, get in X-year not time Yeah, we'll for little rates we're bit outlook, plants optimistic those certainly our we've a sites.

John Roberts

Thank you.

Operator

question Thank now from Please you. your is ahead, Joel Jackson line BMO is open. next Capital from The go Markets.

Joel Jackson

in couple to back. discount placeholder by morning, a we one the questions. go it good I'll that modeling row Is and to in of, on Hi, XX% looks third rate one. a say now John. quarter, thanks a quarter and be here Coming that XX. the fair of a a like rate, for guiding what's discount giving as for you're of QX, couple should based again it John, XX% your on to going so not contracts third guidance

you spot quarter. was weak said quarter, that XX% fair prices, last Chinese it? higher had than help prices of little you third XX bit the a Can discount bit because us rate, of spot a some reconcile the in Now all Chinese the rose

John Floren

I'm changing on rate it's guidance, Yes, certainly at Joel, on the If structural discount change guidance, we're a time. we'll XX. this we my the think not change comfortable permanent

I would the billion at look run an I for overall rate. over quarter that's we and quarter think at-XXX look what the $X price, was excellent generated net-back

happy continue expecting we're second the strong quarter. to price So And the year. in realized pricing half we're very in the of with this

Joel Jackson

that. for you Thank

So, obviously question want my other investors is different different things.

there's you've to for is I what around your question other that price ago you cash be role clear know long valuation looking finance is disconnect, is up you your you you in said power laid at time. have and and You out be between will buffer, weeks the want reducing this, of where share where this you sheet think, you for right, what And are, the now the and and thank GX, going levels cash I buybacks, typically the a being that share in be couple build would you for strategy doing, are, market commodity should your you to earnings make so, stock stock a sure flow on one says your price doing book then and finish the think enough sheet your buybacks $XXX cash disconnect. million balance balance have should buying on price

bit should earlier it maybe it, the make cash have about sense think doing the GX sheet. thought a some and before makes on this risk take why a all you all buyback you're the stock you bit You having but maybe for changing GX, of does balance that, more on

John Floren

Yes, financial you so for as grow changed. business, less a the couple has and accretive not business the a strategy mean fine-tune have point it, to projects is with to then cash the weeks our on excess cash little from that's business out I a slight ago, but maintain we are GX value to to The of generated return bit shareholders. fixed tweak like return shareholders. uses

So and per flexibility in is back increase buyback, and the as methanol enter little able money we share a and think into way at sheet cash higher policy to to tonne realized bit not prices, de-lever bit be more to of $XXX to we that quarters reset in few little buy we have the borrowing a for XX.X but so of our flexible we'll shareholders, dividend GX share. cash at a on balance returning a a

the COVID was you to use and and we for replaced is continued where strategy we project to loan draw our and that. our project during there then construction it plan a with borrow decided and remind GX change we that money we any So on did the on as COVID

to September we So last all with at the out time markets go that bonds get over and to time. just the open bonds, the construction decided were and because

we on back buy going allocated why balance So a GX not sheet. and it we're bit quite have of use to our it's for But cash that's to shares.

Joel Jackson

you. Thank

Operator

go you. next is ahead, from The from Please question now line Thank is Eric open. Citi. Petrie your

Eric Petrie

America spread $XXX roughly record is kind posted at of Methanex's a of and price Asia North a methanol tonne. between

and it it? sustainable you So do forward how level you do Is that think trending? see about going how

John Floren

production think lots of than continue are the number based Yeah, will years Atlantic have that's contrary, to basin and we've higher analysts Basin. a in differentials said the and would of balances price the on despite writing that we issues they and for even we assumed

don't it in So long competitors depends know that product of do a it's we higher the if differential but is really record, with how on this end producing what we're our record, on goes. Atlantic and I the Basin. the It

what expect we're I can't the going will not would our and current to continue. at differentials levels going maybe to they but predict know So to do the competitors are what basin do. that we continue, We

Eric Petrie

you Okay, I metric question, prices, and helpful. And coal a tonne, around think, gas RMB follow-up recent lows. thousand that know mentioned the prices trading my was China higher coal double you natural from per

you of see into coal evolving how cost the do and XXXX? going So prices curve forward

John Floren

Yeah, lot there's not generation. remains readily understand in quite, we and power for a they're available China coal consuming

there's and economic it's which, then the thinking. if of than others let's So generation two were expect activity per thousand China government coal the market, reason fundamentals. thousand we tonne. is coal get there traded to demand continue continues, where that's what really in by coal because and a remember, is we is RMB and anywhere market their higher priced power be spot not chemicals near markets the supply There which market or the set other to for And the would is

You're right North really to shot up, in not has out, point only gas America.

at because the it's shut at Holland. production of think those prices based really $XX way a but of and we year plants the gas in investment. and nobody know you You near it's One have mmbtu $XX a Europe. gas changing the know function an There that see States, United couple on of the prices that's high inventories is two nobody predicting years it's impacted the, but operating is that a methanol But predicted no it's almost down the hard XXX now, in in I gas future Europe in was with quickly to point other know and of to things this and see in at down gas. you minimal is and on that these a one close $X rates ago coming methanol,

So we cure prices, the is commodities. see low prices high is say for in prices I always that's and cure prices high the for and low what

Eric Petrie

Great, thank you.

Operator

you. ahead, Please Thank is Alembic Advisors. your now go Global from Ahmed is line open. The Hassan from next question

Hassan Ahmed

John a question demand. on

You mentioned sequentially up And to global remember I QX I demand down. sequentially if X%. according believe was demand by, was correctly, in estimates your

couple what you So the what going again is, with that question guys the in it, are of you months. Uri is this of forecasting probably remainder it, of sort you have orders, again terms disruptions seeing I'm filling bunch are year? supply or being chain guess demand of about sort as well. lean, growth other over where the for companies last a of function chemical that people is I obviously and question the And of happened a mentioned Storm Inventory Winter mentioned of back

bump from of sense where and feel underlying to X% we even a QX? saw that up a in is demand further could trying get this you expect just So we

John Roberts

Yeah, said we pre-pandemic my in like year. I levels to this back expect later get to remarks

XX% is been operating QX, increased plants at MTO at which operated are high couple is taking are in above the estimate. industry So of our And planned that even years. There rates in demand MTO some they for a maintenance, some really that has QX.

expect MTBE, still applications, pandemic. to to driving are through couple year. demand habits, kinds of of applications lagging A the half this are seeing to globally expect return still but because those biodiesel, the we continue because them to demand, which of grow have could have not So the of we we're second fuels maintenance, a normal some applications, to impact

more are vaccinated a and somewhat to as as people pandemic those to we we back but So, expect under habits get the of brought improve is normal control.

Hassan Ahmed

Understood. the other side of And equation. the

project tick supply a you any supply delays up in seeing guys side, X but Geismar sort new environment the in seeing and announced maybe continues of, restart are people even terms what bringing or broader or healthy you are pricing the to guys ratcheting of sort pricing terms of the online you work speaking response on supply. obviously of their industry of broadly obviously plans up, and On

John Floren

I altogether. just being that through shelved projects were think we for were X cancelled come about years. A thought lot price having that environment the of or Yeah, almost

get expect We current will, will in during run we bit lined up for point Koch this plant July, they they understand ran the expectation. at point, at our to some year now run but and is some a they

Beyond that, Iran, supply backward China of runs a China. have guess, anybody's some a we the plants track plants a on integrate couple capacity on, out bit how then, more MTO been of the Mongolia, in Inner coming will not bit certainly more the and And is has add on record great. and east of in of restrictions other come will as it coast

years from to Koch So expecting net-net, over X over, we're coming X in years. and Iran coming the not much new what's supply beyond

Hassan Ahmed

much. helpful. very so John. Thanks Understood,

John Floren

you. Thank

Operator

Thank ahead, you. Please go question RBC next Capital your Ng from open. Nelson Markets. line from The now is is

Nelson Ng

has a think particular, regions on you, availability you gas were optimistic that going question quick for so you production New in gas earlier forward. In various Zealand, Just I mentioned the in low whether and production like been lower current going of terms are levels you drilling exploration? prices color activity, any in on forward issues, year. this have like pretty incentivizing Do production

John Floren

I'll New remind gas. the is very Yeah, wet Zealand you, gas in

economics liquids that the the lots are there they're really of going and helps really any So liquids. oil prices have and barrels after of

well. in year in expected Zealand. and the Zealand of late complex really exploration was The current higher failed substantially. situation one last caused it's that's to was of market expecting New which situation to up our incentivizes nobody rainfall, Yeah, more gas the lost and that that's the power, New hydro energy is it in is general lack quite had that than development. and its So positive reasons and again and field They winter business a production [indiscernible] for in XX% lower a rained leading tighten their as of

So behind now is drilling going and on. us that there situation is

planning to bit the the the, decade see This and not might of New field, in to certainly drill we'll new reserves XX owners we're drilling start-up know the little the opportunity that the I plants that's a those well. drilling and seen of like positive Zealand, optimistic is and third we'll pretty a they to we've The will well reasonable them. the two and next us for said, and the Maui this in before, we're the develop of Pohokura a end for country is upstream months. results as more think so contracted for be thing I have needs the successful and more, are drilling and

optimistic, we're think results of two-plant upstream. see until really be point this in the the at but I what's happening we we'd yeah, modeling a operation So

Nelson Ng

the for it thanks leave color. Great, there. I'll additional

John Floren

Thanks.

Operator

The ahead, you. next line go Alexander from Please Thank Laurence is now question Jefferies. open. your from is

Laurence Alexander

Hi you're boiler what capacity a similarly, sight years there, of have And construction, years. what methanol in the line use could methanol global you or seeing of flex-fuel X over X shipping that would, that the could what under update development? market could amount ordered that Chinese to on you for next the industrial give and as a is or demand mean

John Floren

Yeah.

loss order [indiscernible] that's Proman, owned on at Maersk and ships of other our has this one we A So, of what's interest. have eight order. time. competitor Trinidad on of our out

So X to years build takes a Laurence. ship, about

the how methanol XX,XXX around many running tonnes. we and would know tonnes going in don't would vessel a of more. I on Each XX,XXX but time XXX% next So the are to XX,XXX placed deadweight years, consume orders few between expect ship more be

can you the there. math do So

there's we diesel. see Yeah, potential that boilers. as coal, but continue natural far market well to gas other as As and replacing

of million would it continues that demand be tonnes to we of So market a to million grow. and to methanol couple expect X

Laurence Alexander

lost more of up sense X% having volume supply a I is? effect of industrial companies What's X% multiplier to or applications so level and mean issues, that about of supply. there probably commodities get of the of we your some kind have pent-up forth. talking when you do demand are but to kind the And downstream chain in you the formaldehyde is because back

John Floren

demand. guessing But I probably with would good guess. have there Yeah, I'd the Laurence be and is I pent-up a assumptions don't agree

Laurence Alexander

Yeah, thank you.

Operator

Holt. go Pickering, line Please from ahead, Matthew question is is your open. The Tudor, from now next Blair

Matthew Blair

period about Trinidad Good is morning, production John. It natural XX% year-to-date same year. down looks gas last versus like

volume guidance raised meaningfully. You your Trinidad pretty

good that's else anything there your going from there? or on procurement team So, just work is

John Floren

the and told what supply year expect guidance of that's our XXX% we balance the year and we've for Atlas most we allocation of [indiscernible] the been did gas Yeah, the of to that's for to for provided. the

Matthew Blair

Great.

Sounds good. drift in know be can your I environment in then thinking higher were we that at QX. about talk QX but and up hedged, modeling? for this US. we the any to be could costs gas as little would whether you're net And And modeling, a factors QX. I'm just Would you point agree there thinking then bit something on you about our the to? should look you seem implied about

John Floren

steps and to Quarter-to-quarter, some, in GX lot for a abnormal our a and few as actually GX. requirements far yeah, lower structure. there a really, our we've cost hedged about it. as than quite you're taken nothing could nothing structure it XX% Yeah, last of of reduce as, bit is right, be year there, but our things we've And here was cost

XX% the So about spot to market. we're exposed

So depending XX% model us by our of for impact you price it on have your gas what about versus requirement. you're would QX what using in

Matthew Blair

thanks for the color. Great,

John Floren

are welcome. You

Operator

is is you. now from next ahead, Thank Rausch Extra go open. Please The Roland your from question Crown Investments. line

Roland Rausch

congratulations of balance cash a quarter. around coming bit ask your would there liquidity sheet. to question another a back one previously to also around on like I capital of on is returns your comments two-pronged and good Well, quite

there So paid net $XXX year. on numbers, the X $XXX a transaction million plus over $XXX to of see lines for if shipping debt cash, down the in updated this in credits has with undrawn in up I [indiscernible] that's million million million is around the $XXX It's that loan. cash, I million if round the unutilized million in construction and company four RCF $XXX

to on or clear at on back the a made shareholders the I want level one that's of start XXX comment XXX, deserve we So year dividend total are the do come to in a to $X why price your think consider to lines do at shares, lows, board call, another next billion announcement program? end you. share you billion then where on a attractive buyback only the and a QX of kicking of would recent in you of prices not looking by large $X.X this September. buy the credits just I we're back GX total you in is to do And as Where you so and I assume you liquidity. what share buy And obviously, got year-to-date so Thank current line, cash shares? your guided of back so for

John Floren

cash want that. attractive our agree our shares, and what I shareholders. It's Yeah. That balance with back stated level. sheet the changed. buy financial do returning we price We around strategy current to, to hasn't to pretty clearly would to with

changed $XXX million flexibly we've whatever on our dividend that company cents to growing down, grow start like cash, returned more we we've the So same reset and years about billion to in plus billion additional described in XX.X and of balance will we include we've XX the company and the we'll maintain $X achieved buybacks. through shareholders the dividends we've we the over sheet. and GX period the is fixed to $X buybacks, to left spending hasn't last spend and Once return shareholders cash could, want dividend that and at would that, over the plan

cash we balance return on project approach same, achieved. cash that our shareholders. spent, the look to going And So in once our the balanced is what's is to toward now addition Then having right will GX we're generation sheet. to

nothing's So, really changed.

Roland Rausch

Okay.

Operator

is go The you. Securities. ahead, now next your line Cherilyn open. TD from Thank question from Radbourne Please is

Cherilyn Radbourne

good much morning. Thanks very and

supply. on? a fixed sort cost price the being perspective and for I contemplate able the prepared methanol think plant you of give terms financial hoping far be in partner what lock is some to current In outlook was as what environment deck you a as might institutions of inflationary with E&C on of to like to methanol new could light in an lend pressure

John Floren

it's that's post-GX. good good, Obviously a well question. a it's Yeah, going to impact us as

information range. we're the process them return. And we public some that in assuming that's the were or the something Koch information the that's take. recently that to may around brownfield or XX% projects on it's a So OCI they plant methanol public And so numbers tonnes our if or X.X public well Methanol other to tonnes, time, you tonne. north of the give Natgasoline at if have XXX around over of saw, to of X.X return greenfield $XXXX that in starting have gas there's we all double-digit those But complete around a to of XX%, pricing use look $X and need assuming would two that's that's million get plant. And XXX you to are billion completed been up Both opportunities. based and get $XXX we higher

there's of to price, looking trying and of, with $XXX but get potential like So those the to quite we years if years a kinds to methanol certainly the seems XX think on lend and returns seems there we've of what like to lots be bank category, to and it that, a in I'm commodity money last we to home. for payback a lots hard find do love out of I said that in in having project project that that, doing money our a a methanol bit a but XX seen volatility you on

Cheryl. happens, of the So kind but we'll are the number see those what

Cherilyn Radbourne

you coming stable in could view for demand to that methanol years. second over then, company's the just And be X speak MTO the one confidence is, will the

John Floren

guess, Yeah, a low has And at happened going on look well we in that environment. only price in what's what can and I been high price industry.

and is X now, that's There X the it to industry certainly is in call And prices couple a years close in of commissioned. years, was look a as wave plants plants. made wave, years couple one and one of more more to $XX X completed to or first was first completion than next call trying the and which completed range, range what just MTO the with we naphtha the first sense up the there's and That So oil $XXX in crackers the ago. we get started that what naphtha about to being second wave. was the wave being

not, So we never and wave we're expected not anticipating. the we're second

we is what So what's run. will there think happen will

of continue rates, to run rates, We they XX% ran at last we they XX% XXXX. high COVID, only have when on pricing had all the rates. operating at history ran because and rates when think olefins high plus $XXX methanol had can They in high we a we I go to low cycle at and year

things. seen methanol a to big most So it's driver XX% on the would like watch because it something that today. predict operating It's is we've rate. expect closely We based for we very to demand XX% But hard what and future.

Operator

Monness you. go Crespi. Thank Shaw question The next ahead, line your Chris is from from is open. Please now

Chris Shaw

site mean all, and possibility the the future? it you I me the only global availability say of specifically, not moving I and another have potential, few really going a Geismar potential view take your the plants what of to Medicine to at ala were economics both in is or but one those Hat, If other any first doesn't of the what on any that can gas I pessimistic I plants, Geismar a Outside for mind Geismar, but to be guess guess guess plants forward.

John Floren

Chile, twin The unique What the unique think had we looked a plants two very we them were expensive move. had up lift I kit they opportunity, but at was and I. that the we've could installed, would way I Chile we built, in move and that built, it say, to in We it's them, the the was have way way to locations. unlikely. other pretty

we now allow are won't giving that is able to get to look us and our time. our are any where the but and to kit Sorry time. of X they and X, be all all yet we run we're now at up to Chile those But hope plants and gas right II contracts which achieve to focus things not Geismar III, running over

debottlenecking. to million our this with company. I the guess So in we the I North history in mean, X.X, and we've have time X.X for longest America of have here any soon, pretty production we're seen the didn't going

there on trying moving is running them focus our so plants get to those yeah, not and time. So based this at gas

Chris Shaw

Geismar jot the to top cost the Thanks. or when my X, lower? you just probably would know. of the, math, down I for one tonne X similar you but your it Geismar reminder, off not say but you relative a the, And then per what move it's head, for when do can be

John Floren

same. Geismar the got We've about X [indiscernible]. to the No, going efficiency X probably bit it significantly. X. spot is that's to not and much gas lower, on but Geismar The superior And to

Chris Shaw

lot. Thanks it. got a Okay,

Operator

go the you. Thank last And question open. is now line your Hansen Steve ahead, Please from James. is from Raymond

Steve Hansen

human positioned may. strained look, feel the well but on for forward going just that on about operating Hey me and strikes are you, you if that positioned so right not your It I we here? operating today, now, today? across about are looking hearing resources you existing John, you focused just we're quick labor one your well both are I'm unskilled, the and think complex you capabilities existing resources whether GX, you're everywhere people? How do complex follow-up, about actually How skilled

John Floren

if Yeah, low turnover low. on not and industry, you one the just, compare rate, rate industry in applications a the to that chemicals our is other turnover were [indiscernible] like average enjoyed We our I not benefits that. industry, company we've mean of very

retirements and aging as countries and to western where, retirement to in age. are bigger So especially a the turnover have we it issue don't we the doesn't mean as tend becoming bigger

risk any labor. talk because of run have today we concern it's don't of that I at the time. our all efficiently not to we're But So being able something about plants

today to labor and really on like each is that little have things we're labor and we really, look unique. of a our of Trinidad, what's diversity members to happened really region our company employer all new for where of So we can is important In are potential kinds because important it's inclusion that really concerned strategy we expand and in Egypt not island. stay time, changing I'm long, and and but that have We not for a wages something people that think about planning to good we the certainly, long on to sure and pay we're short-term, choice. the all place time make philosophy. work. we're we want a And great team

Steve Hansen

you. Okay, helpful, thank great. That's

John Floren

Steve. Thanks,

with Okay, today. well thanks. to very you our results We're share excellent pleased financial

generate across range flow cash of prices. to wide continue We methanol a meaningful

our Our the joining continue you priorities that you the cash capital of track business, our speak and thank in remain returning for and October, with our us pursue again excess you the generate same. opportunities, use record company. accretive maintain Thank we strong we and cash in to to growth value shareholders. today We allocation will interest for

Operator

at lines conference now Thank Please time your you has this The your participation. we you. disconnect ended. and for thank

Methanex (MEOH) 30 Jul 212021 Q2 Earnings call transcript