#USA #Amsterdam #OCI Global #Hassan Badrawi #Beaumont New Ammonia

OCI Global Q1 2025 Trading Update

OCI Global kicked off 2025 with a positive outlook, according to its CEO, Hassan Badrawi. The company has undergone significant changes in its portfolio over the last year, which seem to be paying off. The quarterly update reveals important milestones achieved and strategies in action amidst current market challenges.

Operational Successes

In the first quarter, OCI successfully resolved a dispute with its Natgasoline joint venture partner, Proman. This dispute concerned the sale of OCI Methanol to Methanex, which is now expected to close in the second quarter of 2025 following necessary regulatory approvals. Progress has also been made on the construction of the Beaumont New Ammonia plant, which is set to begin operations later in the year. Despite planned shutdowns affecting some operations in Europe, other sectors within the portfolio exhibited robust performance, contributing to overall company growth.

OCI Global's commitment to enhancing shareholder value is demonstrated through the recent distribution of USD 1.0 billion, leading to total payouts of USD 6.4 billion over the past four years. This distribution reflects the company's strategic approach to capital management, ensuring flexibility and future opportunities. Looking ahead, the focus remains on completing the Beaumont Ammonia construction and finalizing the methanol transaction as projected.

Financial Performance

In terms of numbers, OCI's adjusted EBITDA for continuing operations reflected a loss, yet overall performance improved compared to the previous quarter, highlighting the impact of corporate cost reduction initiatives. The ongoing European Nitrogen business faced challenges from rising gas prices year-over-year, yet profitability persisted thanks to favorable market conditions and effective production strategies.

There remains a focus on simplifying the corporate structure, with efforts aimed at reducing unnecessary costs. OCI, targeting to beat its previous guidance of USD 30-40 million in corporate costs by the end of 2025, seems well-set to achieve its goals.

Methanol and Market Conditions

The methanol sector performed resiliently in Q1 2025, showing 233 thousand tonnes in sales despite a planned turnaround. Nevertheless, average spot prices for methanol improved from the previous year, effectively enhancing revenue even amid reduced production levels. Natgasoline's successful operational return adds to OCI's promising outlook in this sector.

Strategic Partnerships and Initiatives

OCI's commitment to sustainability and innovation is evident through its recent collaborations. For instance, the partnership with Dossche Mills and AGRAVIS to promote sustainable wheat farming through the use of low-carbon fertilizers garnered significant positive impact, with a remarkable increase in sustainable wheat harvested.

Furthermore, OCI partnered with RWZ, aiming to cut CO₂ emissions in farming practices by leveraging low-carbon solutions across thousands of hectares. Additionally, the completion of the first ammonia ship-to-ship bunkering pilot at the Port of Rotterdam underscores OCI's strategic objectives towards eco-friendly alternatives in global shipping.

Future Prospects

OCI Global appears well-positioned moving into the second quarter of 2025, with key priorities identified: ensuring the successful handover of the Beaumont New Ammonia site and closing the methanol sale as planned. The organization aims to further strengthen its stable balance sheet and competitive edge in the European nitrogen market amidst evolving industry landscapes.

With a blend of strategic execution and a focus on sustainability, OCI Global aims to navigate future challenges while maximizing shareholder returns and fostering operational excellence. In doing so, it maintains its commitment to creating value and supporting the long-term viability of agribusiness and chemical production.