OCI NV, Amsterdam, reported a net income attributable to shareholders of the company of $294.8 million for the fourth quarter ended Dec. 31, 2021, compared with a net loss of $56.9 million the previous year. Adjusted net income came in at $447.4 million versus a year-ago net loss of $44.8 million.
Diluted earnings per share were $1.397, up from a negative $0.271 per share in the corresponding prior-year period.
Fourth-quarter adjusted EBITDA increased 291 percent to $1.04 billion, up from the prior-year $265.9 million, while revenues more than doubled, to $2.20 billion versus $1.04 billion a year ago.
OCI attributed the EBITDA jump to higher selling prices year-over-year for all products, which more than offset lower sales volumes due to turnarounds and despite record high natural gas prices in Europe.
The company saw total sales volumes fall 16 percent in the fourth quarter compared with the corresponding prior-year period to 3.43 million mt, down from 4.09 million mt. Total own-product sales volumes were down by 21 percent, to 2.69 million mt from the year-ago 3.4 million mt.
Total own-product fertilizer sales volumes fell by 17 percent, to 2.13 million mt versus the year-ago 2.58 million mt. But total traded third-party sales volumes increased 6 percent during the fourth quarter against the same year-earlier period to 738,600 mt, up from 696,600 mt.
“Our end markets continued their upward trend during the fourth quarter, and we expect the first half of 2022 to be strong, driven by attractive farm economics for our nitrogen fertilizers; strong demand in our industrial end markets for ammonia, methanol, melamine, and DEF; and our advantaged feedstock costs in MENA and the U.S.,” said OCI NV CEO Ahmed El-Hoshy.
“Our current order book looks healthy with some sales into second-quarter 2022. Our distribution capabilities, including the ability to manage inventories close to key demand centers coupled with a disciplined commercial strategy, allow us to optimize benefits from current market conditions,” continued Hoshy.
The CEO highlighted the recent award to Fertiglobe, OCI’s Abu-Dhabi-based Middle Eastern joint venture partnership with Abu Dhabi’s state-energy company, Abu Dhabi National Oil Corp. (ADNOC), to supply 500,000 mt of urea to Ethiopia in the first and second quarters of this year “at an average price of around $725/mt.”
The company noted that in Europe significantly higher gas prices in the fourth quarter versus the corresponding prior-year period resulted in a negative impact of around $147 million, and in the U.S., higher gas prices in the quarter had a negative impact of around $37 million.
OCI’s Nitrogen segment reported a 320 percent increase in adjusted EBITDA to $877.2 million in the fourth quarter, despite the turnarounds and the higher gas prices in Europe and the U.S. This compares to the year-ago $209.1 million.
In the U.S., following the extended turnaround at Iowa Fertilizer Co. (IFCo) during the third quarter of 2021, OCI said IFCo’s contribution to the Nitrogen segment’s – and company-wide – results “increased considerably” compared to the fourth quarter of 2020 and the third quarter of 2021.
The adjusted EBITDA in the Nitrogen U.S. segment increased by 270 percent to $168.5 million in fourth-quarter 2021 from $45.5 million, as higher selling prices more than offset lower volumes and higher gas prices year-on-year.
OCI reported that the Nitrogen Europe segment continued to perform well in a difficult market environment with record-high natural gas input costs. It noted the segment benefited from the company’s flexible business model as well as increased throughput capabilities at the OCI ammonia import terminal in Rotterdam, where throughput capabilities were increased by an annualized rate of around 300,000 mt during the fourth quarter (GM Nov. 12, 2021).
The company said this allowed it to maintain production of its downstream products – CAN, UAN, and melamine – after it temporarily closed one of the two OCI Nitrogen ammonia plants due to the high gas prices in Europe at the beginning of the fourth quarter 2021.
The Nitrogen Europe segment posted a 251 percent increase in fourth-quarter adjusted EBITDA compared with the same prior-year period, to $72.4 million, up from the prior-year $20.6 million, boosted by higher selling prices for all products, and offsetting the negative impact of increased gas prices.
The company noted that CAN sales volumes were relatively flat year-over-year in the fourth quarter, but highlighted the healthy order book in nitrates for the first half of the year. It said it also expected to benefit from its logistics close to core demand centers once the new season starts off.
OCI’s Methanol segment reported a 200 percent jump in adjusted EBITDA for the fourth quarter to $199.3 million, up from the year-ago $88.3 million. The company cited higher methanol prices and the sale of excess EUAs (EU Emission Allowances) more than offsetting lower sales volumes and higher gas prices in the Netherlands and the U.S. compared to a year ago.
The company said its methanol plant in the Netherlands remains shut down due to the high gas price environment after the facility was temporarily shut down in June 2021.
At the Natgasoline facility in Beaumont, Texas, after a period of relatively low operating rates, following the plant’s inaugural planned turnaround starting in the third quarter of 2021, and the resumption of production at the beginning of December, OCI said the plant has achieved rates close to maximum production capacity.
The company also reported good onstream performance at the OCI Beaumont, Texas, plant during the fourth quarter.
Earlier this month, OCI announced it had signed definitive legal agreements to create a strategic alliance with Abu Dhabi’s ADQ and Alpha Dhabi Holding, under which the Abu Dhabi firms will acquire a 15 percent stake in the OCI Methanol Group for $375 million (GM Feb. 11, p. 35). OCI had reported last November it had entered into the strategic alliance (GM Nov. 24, 2021).
The alliance is aimed at positioning the OCI Methanol Group to be able to pursue future growth opportunities in hydrogen-based applications, including fuel.
For full-year 2021, OCI posted a net income attributable to shareholders of the company of $570.5 million, versus a net loss of $177.7 million for FY2020. Adjusted net income came in at $731.8 million compared with a year-ago net loss of $213.4 million.
FY2021 diluted earnings per share were $2.703, versus a negative $0.847 for the previous year.
Adjusted EBITDA for the year increased by 190 percent to $2.53 billion, up from the prior-year $869.8 million, while revenues grew 82 percent, to $6.32 billion versus $3.47 billion in FY2020.
OCI announced a semi-annual interim distribution for the second half of 2021 of €1.45 per share or around $350 million including a $200 million base.
Fertiglobe’s financial results are reported separately in this issue.
OCI Product Sales Volumes
| ‘000 mt | 4Q-2021 | 4Q-2020 | % change | FY-2021 | FY-2020 | % change |
| Own product | ||||||
| Ammonia | 443.0 | 380.0 | +17 | 2,090.3 | 1,656.8 | +26 |
| Urea | 995.6 | 1,472.4 | (32) | 4,327.6 | 4,763.2 | (9) |
| CAN | 279.0 | 290.7 | (4) | 1,176.4 | 1,371.8 | (14) |
| UAN | 412.7 | 434.2 | (5) | 1,354.8 | 1,749.9 | (23) |
| Total fertilizer | 2,130.2 | 2,577.3 | (17) | 8,949.0 | 9,541.7 | (6) |
| Melamine | 35.2 | 37.0 | (5) | 131.9 | 144.6 | (9) |
| DEF | 187.2 | 181.0 | +3 | 612.1 | 636.2 | (4) |
| Total nitrogen products | 2,352.6 | 2,795.3 | (16) | 9,692.9 | 10,322.5 | (6) |
| Methanol1 | 336.7 | 602.4 | (44) | 1,747.2 | 1,926.5 | (9) |
| Total own products sold | 2,689.4 | 3,397.7 | (21) | 11,440.1 | 12,249.0 | (7) |
| Traded third party | ||||||
| Ammonia | 69.2 | 108.1 | (36) | 255.5 | 284.3 | (10) |
| Urea | 252.9 | 275.1 | (8) | 1,295.2 | 910.5 | +42 |
| UAN | 16.9 | 22.6 | (25) | 48.5 | 41.3 | +18 |
| Methanol | 209.0 | 35.2 | +494 | 524.4 | 258.8 | +103 |
| AS | 124.6 | 200.7 | (38) | 467.8 | 712.8 | (34) |
| DEF | 66.2 | 54.9 | +21 | 362.2 | 227.0 | +60 |
| Total traded third party | 738.6 | 696.6 | +6 | 2,953.6 | 2,434.7 | +21 |
| Total own product and traded third party | 3,428.1 | 4,094.3 | (16) | 14,393.7 | 14,683.7 | +2 |
1 Including OCI’s 50 percent share of Natgasoline volumes