OCI Global NV posted a 75% drop in adjusted EBITDA for the second quarter, to $325.6 million from $1.29 billion last year, but beat the average analyst estimate of $313 million (Bloomberg Consensus). Revenues were down 52%, to $1.37 billion from $2.86 billion, missing the average analyst estimate of $1.44 billion (Bloomberg Consensus).
OCI reported an adjusted net loss attributable to shareholders of the company of $6.5 million for the quarter, versus the year-ago net profit of $527.5 million. Adjusted earnings per share were $0.031 against the prior year’s $2.51. The company reported a negative free cash flow (after minority distributors) for the quarter of $222 million.
OCI cited lower selling prices compared to both the same quarter last year and the first quarter of this year as mostly driving the results. Second-quarter own-produced sales volumes were marginally up from last year, to 3.075 million mt from 3.062 million mt, and own-produced fertilizer volumes rose 1% year-over-year, to 2.47 million mt from 2.44 million mt.
The company’s third party sales volumes declined by 12%, however, to 796,500 mt, while total sales volumes were off 2% off year-over-year, to 3.872 million mt.
OCI Global CEO Ahmed El-Hoshy said nitrogen prices bottomed out during the second quarter and have rebounded in the third quarter, with Egypt urea prices up around 60% from “trough levels” in June 2023, “underpinned by demand recovery, record low inventories, and very tight supply.”
For the first half of 2023, OCI posted a 71% decline in adjusted EBITDA to $661.8 million on revenue of $2.74 billion, down from the year-ago $2.26 billion and $5.186 billion, respectively. Revenues were down 47% year-over-year.
The company reported a six-month adjusted net loss attributable to shareholders of the company of $21.7 million, compared with a net profit of $881.7 million for the same period last year. Adjusted six-month earnings per share were $0.103 versus the prior year’s $4.196.
OCI Product Sales Volumes
| ‘000 mt | 2Q-2023 | 2Q-2022 | % change | 1H-2023 | 1H-2022 | % change |
| Own Product | ||||||
| Ammonia | 508.3 | 547.6 | (7) | 830.1 | 934.3 | (11) |
| Urea | 1,140.8 | 1,192.7 | (4) | 2,309.5 | 2,234.8 | +3 |
| CAN | 345.4 | 276.8 | +25 | 522.0 | 568.2 | (8) |
| UAN | 473.0 | 426.1 | +11 | 673.1 | 755.7 | (11) |
| Total Fertilizer | 2,467.5 | 2.443.2 | +1 | 4,334.7 | 4,493.0 | (4) |
| Melamine | 17.7 | 30.1 | (41) | 27.8 | 61.1 | (55) |
| DEF | 188.0 | 217.7 | (14) | 362.8 | 443.9 | (18) |
| Total Nitrogen Products | 2,673.2 | 2,691.0 | (1) | 4,725.3 | 4,998.0 | (5) |
| Methanol1 | 402.0 | 370.5 | +9 | 623.6 | 652.0 | (4) |
| Total Own Products Sold | 3,075.2 | 3,061.5 | 0 | 5,348.9 | 5,650.0 | (5) |
| Traded Third Party | ||||||
| Ammonia | 121.5 | 61.4 | +98 | 164.3 | 118.6 | +39 |
| Urea | 344.4 | 403.4 | (15) | 576.1 | 853.2 | (32) |
| UAN | 31.3 | 58.7 | (47) | 83.7 | 83.0 | +1 |
| Methanol | 96.2 | 74.2 | +30 | 225.7 | 218.3 | +3 |
| Ethanol and Other | 23.0 | – | – | 37.0 | – | – |
| AS | 94.7 | 191.7 | (51) | 145.6 | 285.8 | (49) |
| DEF | 85.4 | 110.6 | (23) | 137.7 | 195.7 | (30) |
| Total Traded Third Party | 796.5 | 900.0 | (12) | 1,370.1 | 1,754.6 | (22) |
| Total Own Product and Traded Third Party | 3,871.7 | 3,961.5 | (2) | 6,719.0 | 7,404.5 | (9) |
1 Including OCI’s 50 percent share of Natgasoline volumes
OCI said it launched a cost optimization initiative in May, with target run-rate savings of at least $100 million per annum, of which at least 50 million are expected to be achieved by the end of 2024 at Fertiglobe, OCI’s nitrogen joint venture with ADNOC.
It also expects to report this year on key takeaways and potential decisions related to an ongoing strategic review of all its business lines aimed at unlocking value (GM May 12, p. 26). The review will include an assessment of its Amsterdam stock market, with the Middle East and US being considered as possible alternative listing venues.
OCI said its 1.1 million mt/y blue ammonia plant under development in Beaumont, Texas, remains on track to start production in early 2025, with piling for the ammonia plant complete, foundations and civil works well underway, and erection of steel structures started. OCI and Linde Plc in February signed a long-term agreement under which Linde will supply clean hydrogen and nitrogen feedstocks to the new plant (GM Feb. 10, p. 1).
The expansion of the OCI ammonia import terminal at Rotterdam to 1.2 million mt/y throughput capacity is also on track to start in the first quarter of next year (GM June 17, 2022).
Additionally, the company said it is on track to start production of Diesel Exhaust Fluid (DEF)/AdBlue at OCI Nitrogen in the Netherlands in the first quarter of 2024 (GM Feb. 17, p. 33). The project will add 300,000 mt of DEF for a 100,000 mt of urea equivalent.