OCI NV, Amsterdam, posted a first-quarter adjusted net income attributable to shareholders of the company of $94.4 million versus an adjusted net loss of $82 million a year ago. The net income before adjustments for the quarter came at $98.6 million, against the prior year’s $81.4 million net loss. Diluted earnings per share was $0.468 versus a year-ago negative $0.388.
Adjusted EBITDA increased 134 percent to what the company described as a record $451.8 million, up from $193 million, while revenue increased 38 percent, to $1.12 billion, up from $811.1 million.
OCI shares jumped as much as 8.4 percent to the highest intraday level since November 2019 after the company posted “a surprise EBITDA beat” for the quarter, and sees an even better second quarter, according to a Bloomberg report, citing a note to investors by Brussels-based Bank Degroof Petercam.
The report cited Degroof Petercam analyst Frank Claassen, who wrote that the consensus underestimated the rally in several nitrogen fertilizers prices so far this year, which boosted OCI’s EBITDA. OCI’s management outlook for a stronger second quarter shows higher nitrogen fertilizer and methanol prices have a greater impact than seen earlier, he wrote.
“We have benefited from our diverse stream of global revenues and our competitive position on the global cost curve, with around half of our total global gas requirement at fixed gas prices. This has benefited Fertiglobe in particular, which has more than doubled its EBITDA year-on-year,” said OCI NV CEO Ahmed El-Hoshy in the company’s May 5 earnings statement.
“The outlook for OCI remains positive for the second quarter and beyond, supported by strong underlying demand for nitrogen fertilizers driven by healthy farm economics, and a continued recovery in our industrial markets for ammonia, methanol, melamine and DEF,” he said.
El-Hoshy highlighted that despite downtime and lost volumes during extreme cold weather conditions in the first quarter, the company was able to increase its sales in March and April, which he said bodes well for second-quarter results.
“Based on current visibility on volumes and pricing, we expect a stronger second quarter with higher adjusted EBITDA than in quarter one, and expect further deleveraging during the second quarter,” he said.
The CEO noted that the company’s U.S. Midwest operations are benefiting from a combination of higher prices and sales volumes in the second quarter. In Europe, a significantly better performance is also expected in the second quarter compared to quarter one, when OCI had some downtime at its plants, and as the company benefits from higher ammonia and melamine prices in particular.
For Fertiglobe, robust import demand in Latin America, Australia, and India is driving healthy urea volumes in the second quarter, said El-Hoshy.
Looking to the remainder of 2021, the CEO noted that nitrogen fundamentals are healthy and that OCI expects to remain in a demand-driven environment, with strong agricultural demand continuing to drive corn prices to higher levels, supporting farm economics and nitrogen demand and prices.
OCI Nitrogen Segment
| $ million | Nitrogen U.S. | Europe | Fertiglobe | Elim. | Total Nitrogen | |
| 1Q-2021 | ||||||
| Total Revenues | 103.9 | 220.2 | 543.4 | (17.9) | 849.6 | |
| EBITDA | 79.7 | 26.4 | 233.0 | 0.2 | 339.3 | |
| Adjusted EBITDA | 79.7 | 26.4 | 233.0 | 0.2 | 339.3 | |
| 1Q-2020 | ||||||
| Total Revenues | 118.7 | 162.4 | 363.3 | (11.9) | 632.5 | |
| EBITDA | 41.1 | 25.3 | 110.1 | 1.0 | 177.5 | |
| Adjusted EBITDA | 41.1 | 25.3 | 113.6 | 1.0 | 181.0 | |
First-quarter OCI-produced sold volumes increased 9 percent to 2.99 million mt, up from 2.74 million mt the previous year. Total own-produced nitrogen product volumes were up 6 percent, to 2.48 million mt, driven by strong growth in Fertiglobe, DEF, and CAN volumes, offsetting production losses from weather-related downtime in the U.S.
Traded third-party volume sales dipped 4 percent in the quarter compared with a year ago, to 532,200 mt. The company’s total sales volumes rose 7 percent to 3.52 million mt. The company highlighted selling prices improved year-on-year for all products.
OCI Product Sales Volumes
| ‘000 mt | 1Q-2021 | 1Q-2020 | % change |
| Own product | |||
| Ammonia | 587.0 | 541.5 | +8 |
| Urea | 1,103.2 | 1,116.2 | (1) |
| CAN | 328.4 | 170.2 | +93 |
| UAN | 279.9 | 340.0 | (18) |
| Total fertilizer | 2,298.5 | 2,167.9 | +6 |
| Melamine | 34.2 | 30.5 | +12 |
| DEF | 150.8 | 140.4 | +7 |
| Total nitrogen products | 2,483.5 | 2,338.8 | +6 |
| Methanol1 | 507.1 | 399.0 | +27 |
| Total own products sold | 2,990.6 | 2,737.8 | +9 |
| Traded third party | |||
| Ammonia | 41.1 | 74.3 | (45) |
| Urea | 220.5 | 158.1 | +39 |
| UAN | 13.6 | 5.8 | +134 |
| Methanol | 78.7 | 99.8 | (21) |
| AS | 118.5 | 158.6 | (25) |
| DEF | 59.8 | 55.6 | +8 |
| Total traded third party | 532.2 | 552.2 | (4) |
| TOTAL | 3,522.8 | 3,290.0 | +7 |
1 Including OCI’s 50 percent share of Natgasoline volumes