UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF
APRIL 2008
METHANEX CORPORATION
(Registrants name)
SUITE 1800, 200 BURRARD STREET, VANCOUVER, BC V6C 3M1 CANADA
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form
20-F or Form 40-F.
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
If Yes is marked, indicate below the file number assigned to the registrant in connection with
Rule 12g3-2(b): 82
.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on behalf by the undersigned, thereunto duly authorized.
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METHANEX CORPORATION
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Date: April 23, 2008
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By:
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/s/ RANDY MILNER
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Name:
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Randy Milner
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Title:
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Senior Vice President, General Counsel
& Corporate Secretary
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NEWS RELEASE
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For immediate release
METHANEX ANNOUNCES FIRST QUARTER RESULTS
April 23, 2008
For the first quarter of 2008, Methanex reported Adjusted EBITDA
1
of $127 million, net
income of $65 million and earnings per share of $0.67 (on a diluted basis).
Bruce Aitken, President and CEO of Methanex commented, Our average realized price in the first
quarter was $545 per tonne which resulted in another good quarter of earnings for our shareholders.
Our earnings under this pricing environment would normally be higher, however, we sourced less of
our sales from produced methanol during the first quarter and more from purchased methanol and this
had an impact on our profitability. In addition, methanol pricing peaked in December and
decreased through the first quarter and, as is typical in a decreasing methanol price environment,
our sales margins on both produced and purchased methanol are impacted by inventory timing issues.
Mr. Aitken added, In the high methanol price environment of the last six months, we saw China
moving from being a net importer to a net exporter, which we believe has been the most significant
factor causing the methanol market to rebalance and methanol prices to decline. We have also seen
some regional softness in demand in some derivatives, but globally we continue to observe that
demand for methanol is healthy and the high energy price environment continues to underpin strong
demand growth for new methanol demand in energy applications, particularly in DME and fuel blending
in China.
Mr. Aitken continued, China has recently reverted to being a net importer and spot methanol prices
are increasing. We are continuing to make good progress on our initiatives to source more gas in
Chile and we recently agreed to terms on a gas supply arrangement in New Zealand which will allow
us to switch production to one of our larger idle plants in the second half of the year.
Mr. Aitken concluded, Our strong cash generation in the first quarter continues to leave us in a
strong financial position. With US$465 million cash on hand at the end of the quarter, a strong
balance sheet and a US$250 million undrawn credit facility, we are well positioned to meet our
financial commitments related to the Egypt methanol project, pursue opportunities to accelerate
natural gas development in southern Chile, pursue opportunities to sponsor methanol demand in new
energy applications, pursue other strategic growth initiatives, and continue to deliver on our
commitment to return excess cash to shareholders.
A conference call is scheduled for Thursday, April 24, 2008 at 11:00 am EST (8:00 am PST) to review
these first quarter results. To access the call, dial the Telus Conferencing operator ten minutes
prior to the start of the call at (416) 883-0139, or toll free at (888) 458-1598. The passcode for
the call is 45654. A playback version of the conference call will be available for fourteen days at
(877) 653-0545. The reservation number for the playback version is 518972. There will be a
simultaneous audio-only webcast of the conference call, which can be accessed from our website at
www.methanex.com. In addition, an audio recording of the conference call can be downloaded from our
website for three weeks after the call.
Methanex is a Vancouver based, publicly traded company engaged in the worldwide production,
distribution and marketing of methanol. Methanex shares are listed for trading on the Toronto Stock
Exchange in Canada under the trading symbol MX, on the NASDAQ Global Market in the United States
under the trading symbol MEOH, and on the foreign securities market of the Santiago Stock Exchange in Chile under
the trading symbol Methanex. Methanex can be visited online at www.methanex.com.
- more -
FORWARD-LOOKING STATEMENTS
Information contained in this press release and the attached First Quarter 2008 Managements
Discussion and Analysis contains forward-looking statements. Certain material factors or
assumptions were applied in drawing the conclusions or making the forecasts or projections that are
included in these forward-looking statements. Methanex believes that it has a reasonable basis for
making such forward-looking statements. However, forward-looking statements, by their nature,
involve risks and uncertainties that could cause actual results to differ materially from those
contemplated by the forward-looking statements. The risks and uncertainties include those attendant
with producing and marketing methanol and successfully carrying out major capital expenditure
projects in various jurisdictions, the ability to successfully carry out corporate initiatives and
strategies, conditions in the methanol and other industries including the supply and demand balance
for methanol, the success of natural gas exploration and development activities in southern Chile
and our ability to obtain any additional gas in that region on commercially acceptable terms,
actions of competitors and suppliers, actions of governments and governmental authorities, changes
in laws or regulations in foreign jurisdictions, world-wide economic conditions and other risks
described in our 2007 Managements Discussion & Analysis and the attached First Quarter 2008
Managements Discussion and Analysis. Undue reliance should not be placed on forward-looking
statements. They are not a substitute for the exercise of ones own due diligence and judgment. The
outcomes anticipated in forward-looking statements may not occur and we do not undertake to update
forward-looking statements. These materials also contain certain non-GAAP financial measures.
Non-GAAP financial measures do not have any standardized meaning and therefore are unlikely to be
comparable to similar measures used by other companies. For more information regarding these
non-GAAP measures, please see our 2007 Managements Discussion & Analysis and the attached First
Quarter 2008 Managements Discussion and Analysis.
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1
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Adjusted EBITDA is a non-GAAP measure that does not have any standardized meaning
prescribed by Canadian generally accepted accounting principles (GAAP) and therefore is
unlikely to be comparable to similar measures presented by other companies. Refer to
Supplemental Non-GAAP Measures in the attached First Quarter 2008 Managements Discussion and
Analysis for a description of each Supplemental Non-GAAP Measure and a reconciliation to the
most comparable GAAP measure.
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-end-
For further information, contact:
Jason Chesko
Director, Investor Relations
Tel: 604.661.2600
At April 23, 2008
the Company had
94,781,117 common
shares issued and
outstanding and
stock options
exercisable for
1,702,779
additional common
shares.
Share Information
Methanex Corporations common
shares are listed for trading
on the Toronto Stock Exchange
under the symbol MX, on the
Nasdaq Global Market under the
symbol MEOH and on the foreign
securities market of the
Santiago Stock Exchange in
Chile under the trading symbol
Methanex.
Transfer Agents & Registrars
CIBC Mellon Trust Company
320 Bay Street
Toronto, Ontario, Canada M5H 4A6
Toll free in North America:
1-800-387-0825
Investor Information
All financial reports, news
releases and corporate
information can be accessed on
our website at www.methanex.com.
Contact Information
Methanex Investor Relations
1800 200 Burrard Street
Vancouver, BC Canada V6C 3M1
E-mail: invest@methanex.com
Methanex Toll-Free: 1-800-661-8851
FIRST QUARTER MANAGEMENTS DISCUSSION AND ANALYSIS
Except where otherwise noted, all currency amounts are stated in United States dollars.
This first quarter 2008 Managements Discussion and Analysis should be read in conjunction with the
2007 Annual Consolidated Financial Statements and the Managements Discussion and Analysis included
in the Methanex 2007 Annual Report. The Methanex 2007 Annual Report and additional information
relating to Methanex is available on SEDAR at
www.sedar.com
and on EDGAR at
www.sec.gov
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Three Months Ended
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Mar 31
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Dec 31
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Mar 31
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($ millions, except where noted)
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2008
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2007
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2007
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Sales volumes (thousands of tonnes)
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Produced methanol
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678
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997
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1,139
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Purchased methanol
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669
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421
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376
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Commission sales
1
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143
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195
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138
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Total sales volumes
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1,490
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1,613
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1,653
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Methanex average non-discounted posted price
(per tonne)
2
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703
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637
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537
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Average realized price (per tonne)
3
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545
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514
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444
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Adjusted EBITDA
4
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127.1
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270.3
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236.9
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Cash flows from operating activities
4 5
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102.3
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187.8
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179.0
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Operating income
4
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104.0
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241.3
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213.1
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Net income
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65.5
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171.7
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144.7
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Basic net income per common share
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0.67
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1.74
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1.38
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Diluted net income per common share
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0.67
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1.72
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1.37
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Common share information (millions of shares):
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Weighted average number of common shares
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97.2
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98.9
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105.1
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Diluted weighted average number of common shares
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97.5
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99.6
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105.6
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Number of common shares outstanding, end of period
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95.6
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98.3
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104.2
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1
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Commission sales represent volumes marketed on a commission basis. Commission income is included in revenue when earned.
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2
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Methanex average non-discounted posted price represents the average of our non-discounted posted prices in North America, Europe and Asia Pacific
weighted by sales volume. Current and historical pricing information is available at www.methanex.com.
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3
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Average realized price is calculated as revenue, net of commissions earned, divided by the total sales volumes of produced and purchased methanol.
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4
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These items are non-GAAP measures that do not have any standardized meaning prescribed by Canadian generally accepted accounting principles (GAAP)
and therefore are unlikely to be comparable to similar measures presented by other companies. Refer to
Supplemental Non-GAAP Measures
for a description of each
non-GAAP measure and a reconciliation to the most comparable GAAP measure.
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5
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Cash flows from operating activities in the above table represents cash flows from operating activities before changes in non-cash working capital.
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METHANEX CORPORATION 2008 FIRST QUARTER REPORT
MANAGEMENTS DISCUSSION AND ANALYSIS
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PAGE 1
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PRODUCTION SUMMARY
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Q1 2008
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Q4 2007
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Q1 2007
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(thousands of tonnes)
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Capacity
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Production
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Production
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Production
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Chile I, II, III and IV
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960
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309
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288
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751
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Titan
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213
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217
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220
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225
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Atlas (63.1% interest)
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268
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293
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278
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180
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New Zealand
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132
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120
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75
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118
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1,573
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939
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861
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1,274
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Chile
Our methanol facilities in Chile produced 309,000 tonnes during the first quarter of 2008 compared
with total capacity of 960,000 tonnes. We have natural gas supply contracts for approximately 60%
of our natural gas requirements for our production facilities in Chile from natural gas suppliers
in Argentina. Since June 2007, the government of Argentina has curtailed all natural gas exports to
our plants and we continue to source natural gas supply to our facilities exclusively from Chile.
We source natural gas from Chile primarily from Empresa Nacional del Petroleo (ENAP), the Chilean
state-owned energy company, and from GeoPark Chile Limited (GeoPark).
During the first quarter of 2008, the government of Argentina announced an increase of natural gas
export duties from 45% to 100% of the highest contracted import price of natural gas into Argentina
and it is expected that this would currently represent an export duty in excess of US$7 per mmbtu.
Natural gas exports have not been reinstated and if they were, our natural gas contracts provide
that the gas suppliers must pay any duties levied by the government of Argentina. However, given
the increased duties we do not expect to receive natural gas supply from Argentina.
We believe the solution to these issues of natural gas supply from Argentina is to source more
natural gas from suppliers in Chile. We are pursuing investment opportunities with ENAP and GeoPark
to help accelerate natural gas exploration and development in areas of southern Chile which lie
close to our production facilities. In late 2007, we signed an agreement with GeoPark under which
we will provide US$40 million in financing to support and accelerate GeoParks natural gas
exploration and development activities in the Fell Block in southern Chile. Under the arrangement,
GeoPark will also provide us with natural gas supply sourced from the Fell Block under a 10-year
exclusive supply agreement. In late 2007, the government of Chile completed its first international
bidding round to assign natural gas exploration areas that lie close to our production facilities
and announced the participation of five international oil and gas companies. Exploration and
development activities in these areas in southern Chile are expected to begin during the second
quarter of 2008.
We cannot provide assurance that ENAP, GeoPark or others will be successful in the exploration and
development of natural gas or that we would obtain any additional natural gas from suppliers in
Chile on commercially acceptable terms.
Trinidad
Our methanol facilities in Trinidad operated well during the first quarter of 2008 and produced a
total of 510,000 tonnes compared with 498,000 tonnes during the fourth quarter of 2007.
New Zealand
Our Waitara Valley facility in New Zealand produced 120,000 tonnes during the first quarter of 2008
compared with 75,000 tonnes during fourth quarter of 2007. Production was lower than capacity
during the fourth quarter of 2007 at this facility as a result of planned maintenance activities.
We have secured sufficient natural gas supply that will allow us to produce at this facility until
at least mid-2008.
In addition to our 530,000 tonne Waitara Valley facility which we have operated over the past few
years, we have up to 1.9 million tonnes of additional flexible annual operating capacity from our
idled Motunui facilities in New Zealand. We have agreed to terms on a natural gas supply
arrangement which will allow us to restart one idled 900,000 tonne per year Motunui methanol plant
in mid-2008 and operate this facility until at least the end of 2009. This agreement is subject to
some final authorization procedures which we expect to conclude in a few weeks. We plan to continue
to operate the Waitara Valley facility until the Motunui plant restarts. The continued operations
of the flexible New Zealand facilities is dependant upon industry supply and demand and the
availability of natural gas on commercially acceptable terms.
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METHANEX CORPORATION 2008 FIRST QUARTER REPORT
MANAGEMENTS DISCUSSION AND ANALYSIS
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PAGE 2
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EARNINGS ANALYSIS
The operating results for our production facilities in Chile, Trinidad and New Zealand represent a
substantial proportion of our Adjusted EBITDA and, accordingly, we separately discuss changes in
average realized price, sales volumes and total cash costs related to these facilities. For a
further discussion of the definitions and calculations used in our Adjusted EBITDA analysis, refer
to
How We Analyze Our Business
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For the first quarter of 2008 we recorded Adjusted EBITDA of $127.1 million and net income of $65.5
million ($0.67 per share on a diluted basis). This compares with Adjusted EBITDA of $270.3 million
and net income of $171.7 million ($1.72 per share on a diluted basis) for the fourth quarter of
2007 and Adjusted EBITDA of $236.9 million and net income of $144.7 million ($1.37 per share on a
diluted basis) for the first quarter of 2007.
Adjusted EBITDA
The increase (decrease) in Adjusted EBITDA resulted from changes in the following:
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Q1 2008
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Q1 2008
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compared with
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compared with
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($ millions)
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Q4 2007
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Q1 2007
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Average realized price
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$
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4
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$
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51
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Sales volumes
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(95
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(106
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Total cash costs
1
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2
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(21
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Purchased methanol
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(54
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(34
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$
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(143
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$
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(110
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1
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Includes cash costs related to methanol produced at our Chile, Trinidad and New
Zealand facilities as well as consolidated selling, general and administrative expenses and
fixed storage and handling costs.
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Average realized price
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Three Months Ended
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Mar 31
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Dec 31
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Mar 31
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($ per tonne, except where noted)
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2008
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2007
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2007
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Methanex average non-discounted posted price
1
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703
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637
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537
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Methanex average realized price
2
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545
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514
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444
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Average discount
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22%
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1%
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17%
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1
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Methanex average non-discounted posted price represents the average of our
non-discounted posted prices in North America, Europe and Asia Pacific weighted by sales
volume. Current and historical pricing information is available at www.methanex.com.
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2
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Methanex average realized price disclosed above is calculated as revenue, net of
commissions earned, divided by the total sales volumes of produced and purchased methanol.
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We commenced 2008 in a tight methanol market environment as a result of planned and unplanned
supplier outages, including outages at our Chile facilities, which began in the second half of
2007. Our average non-discounted posted price for the first quarter of 2008 was $703 per tonne
compared with $637 per tonne for the fourth quarter of 2007 and $537 per tonne for the first
quarter of 2007. Our average realized price for the first quarter of 2008 was $545 per tonne
compared with $514 per tonne for the fourth quarter of 2007 and $444 per tonne for the first
quarter of 2007. For the first quarter of 2008 our average realized price was approximately 22%
lower than our average non-discounted posted price. This compares with approximately 19% lower for
the fourth quarter of 2007 and 17% lower for the first quarter of 2007. We have entered into
long-term contracts for a portion of our production volume with certain global customers where
prices are either fixed or linked to our costs plus a margin and accordingly, we expect the
discount from our average non-discounted posted prices to widen during periods of higher methanol
pricing. The discount from our average non-discounted posted price widened during the first quarter
of 2008 compared with the fourth quarter of 2007 primarily as a result of higher methanol pricing
and lower sales volumes.
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METHANEX CORPORATION 2008 FIRST QUARTER REPORT
MANAGEMENTS DISCUSSION AND ANALYSIS
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PAGE 3
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For the purposes of our Adjusted EBITDA analysis, the average realized price for sales of produced
methanol will differ from the Methanex average realized price disclosed above as sales under these
long-term contracts are allocated to sales of produced methanol. During the first quarter of 2008,
our total sales volumes of produced methanol decreased by 319,000 tonnes compared with the fourth
quarter of 2007. As a result, sales volumes with pricing that is fixed or linked to our costs plus
a margin represented a significantly higher proportion of our total sales volumes of produced
methanol during the first quarter of 2008 compared with the fourth quarter of 2007. The change in
our average realized price for produced methanol for the first quarter of 2008 increased our
Adjusted EBITDA by $4 million compared with the fourth quarter of 2007 and increased our Adjusted
EBITDA by $51 million compared with the first quarter of 2007.
Sales volumes of produced methanol
Sales volumes of methanol produced at our production hubs in Chile, Trinidad and New Zealand for
the first quarter of 2008 were lower by 319,000 tonnes compared with the fourth quarter of 2007 and
lower by 461,000 tonnes compared with the first quarter of 2007 and this decreased Adjusted EBITDA
by $95 million and $106 million, respectively. During the first quarter of 2008, our sales volumes
of produced methanol were lower than our production volumes resulting in a rebuilding of our
produced inventories during the first quarter of 2008. This, combined with lower overall sales
volumes, has resulted in the decrease in sales of produced methanol compared with the fourth
quarter of 2007.
Total cash costs
Our production facilities are underpinned by natural gas purchase agreements with pricing terms
that include base and variable price components. The variable component is adjusted in relation to
increases in methanol prices above pre-determined prices.
Total cash costs for the first quarter of 2008 were lower than in the fourth quarter of 2007 by $2
million. Natural gas costs on produced methanol were higher during the first quarter of 2008 by $9
million compared with the fourth quarter of 2007 primarily due to the timing of inventory flows.
Methanol pricing increased significantly during the fourth quarter of 2007 and high pricing has
continued throughout the first quarter of 2008. Natural gas costs on sales of produced methanol
during the fourth quarter of 2007 were lower than the first quarter of 2008 primarily as a result
of the impact of selling lower cost opening inventory which was produced at lower methanol pricing
in the third quarter of 2007. During the fourth quarter of 2007, we also had a drawdown of produced
inventory volumes which resulted in a high proportion of our production being sold in the quarter.
During the first quarter of 2008, our selling, general and administrative expenses were lower by $5
million than the fourth quarter of 2007 primarily as a result of the lower stock-based compensation
expense due to changes in our share price as well as lower consulting and other costs. Fixed
unabsorbed production costs for our production facilities were lower in the first quarter of 2008
by $4 million compared with the fourth quarter of 2007 primarily as a result of planned maintenance
activities at our Waitara Valley facility in New Zealand in the fourth quarter of 2007. During the
first quarter of 2008, our ocean freight costs were lower by $5 million compared with the fourth
quarter of 2007 as a result of higher backhaul profits. Also, due to lower operating rates at our
Chilean operations brought on by the curtailment of natural gas exports from Argentina, we made the
decision during the first quarter of 2008 to reorganize our Chilean operations and reduce the work
force by approximately 15%, or 39 employees. As a result, we accrued approximately $3 million in
severance and termination costs during the first quarter of 2008.
Total cash costs for the first quarter of 2008 were higher than in the first quarter of 2007 by $21
million. During the first quarter of 2008, natural gas and other costs were higher by $6 million
compared with the first quarter of 2007 due to the impact of higher methanol pricing. During the
first quarter of 2008, our selling, general and administrative expenses were higher by $4 million
than the first quarter of 2007 as a result of higher stock-based compensation expense as a result
of changes in our share price, and higher costs from the impact of foreign exchange rates. Fixed
unabsorbed production costs for our production
facilities were higher in the first quarter of 2008 by $5 million compared with the first quarter
of 2007 primarily as a result of lower production at our Chile facilities. The remaining increase
in cash costs of $3 million during the first quarter of 2008 compared with the first quarter of
2007 primarily relates to higher ocean freight costs as a result of lower backhaul profits. During
the first quarter of 2008, we also accrued approximately $3 million in severance and termination
costs related to the reorganization of our Chilean operations described above.
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METHANEX CORPORATION 2008 FIRST QUARTER REPORT
MANAGEMENTS DISCUSSION AND ANALYSIS
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PAGE 4
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Margin on sale of purchased methanol
We purchase additional methanol produced by others through long-term and short-term offtake
contracts or on the spot market to meet customer needs and support our marketing efforts.
Consequently, we realize holding gains or losses on the resale of this product depending on the
methanol price at the time of resale. During the first quarter of 2008, our cash margin was
negative $19 million on the resale of 0.7 million tonnes of purchased methanol compared with a
positive cash margin of $35 million on the resale of 0.4 million tonnes for the fourth quarter of
2007 and a positive cash margin of $15 million on the resale of 0.4 million tonnes for the first
quarter of 2007. The negative cash margin earned during the first quarter of 2008 is primarily due
to sales of methanol that was purchased at higher prices in the fourth quarter of 2007.
Depreciation and Amortization
Depreciation and amortization was $23 million for the first quarter of 2008 compared with $29
million for the fourth quarter of 2007 and $24 million for the first quarter of 2007. The decrease
in depreciation and amortization for the first quarter of 2008 compared with the fourth quarter of
2007 is primarily as a result of lower sales volumes of produced methanol.
Interest Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Mar 31
|
|
Dec 31
|
|
Mar 31
|
($ millions)
|
|
2008
|
|
2007
|
|
2007
|
|
Interest expense before capitalized interest
|
|
|
$
|
14
|
|
|
$
|
13
|
|
|
$
|
11
|
|
Less capitalized interest
|
|
|
|
(3
|
)
|
|
|
(2
|
)
|
|
|
|
|
|
Interest expense
|
|
|
$
|
11
|
|
|
$
|
11
|
|
|
$
|
11
|
|
|
Interest expense before capitalized interest for the first quarter of 2008 was $14 million compared
with $13 million for the fourth quarter of 2007 and $11 million for the first quarter of 2007. In
May 2007, we reached financial close and secured limited recourse debt of $530 million for our
joint venture project to construct a 1.3 million tonne per year methanol facility in Egypt.
Interest costs related to this project have been capitalized since that date.
Interest and Other Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Mar 31
|
|
Dec 31
|
|
Mar 31
|
($ millions)
|
|
2008
|
|
2007
|
|
2007
|
|
Interest and other income (expense)
|
|
|
$
|
(1
|
)
|
|
$
|
3
|
|
|
$
|
5
|
|
|
During the first quarter of 2008, interest and other income (expense) was an expense of $1 million
compared with income of $3 million for the fourth quarter of 2007 and $5 million for the first
quarter of 2007. The decrease in income during the first quarter of 2008 was due to the impact of
changes in foreign exchange rates as well as lower interest income as a result of lower interest
rates.
Income Taxes
The effective tax rate for the first quarter of 2008 was 29% compared with 26% for the fourth
quarter of 2007 and 30% for the first quarter of 2007. The statutory tax rate in Chile and
Trinidad, where we earn a substantial portion of our pre-tax earnings, is 35%. Our Atlas facility
in Trinidad has partial relief from corporation income tax until 2014.
In Chile the tax rate consists of a first tier tax that is payable when income is earned and a
second tier tax that is due when earnings are distributed from Chile. The second tier tax is
initially recorded as future income tax expense and is subsequently reclassified to current income
tax expense when earnings are distributed. Accordingly, the ratio of current income tax expense to total income tax expense is
highly dependent on the level of cash distributed from Chile.
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
MANAGEMENTS DISCUSSION AND ANALYSIS
|
|
PAGE 5
|
SUPPLY/DEMAND FUNDAMENTALS
We commenced 2008 in a tight methanol market environment as a result of planned and unplanned
supplier outages in the second half of 2007. This resulted in high methanol prices during the first
quarter which are unsustainable in a normal supply and demand environment. During the first
quarter, due to a rebuilding of global inventories, methanol prices have moderated, but remain at a
high level. Methanex non-discounted posted prices for April average approximately $490 per tonne
across the major regions and we have announced a non-discounted price of $499 per tonne for May in
North America.
To the end of 2008, we expect the next increment of world-scale capacity to be the 1.7 million
tonne per year plant under construction in Saudi Arabia. We expect product from this plant should
be available to the market in the second half of 2008. In addition, there are 1.7 million tonne per
year plants under construction in Malaysia and Iran, and we expect product from both of these
plants to be available to the market in the first half of 2009. We also believe that global
methanol demand growth combined with the potential shutdown of high cost capacity as a result of
high feedstock prices could offset this new industry supply.
Methanex Non-Discounted Regional Posted Prices
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apr
|
|
Mar
|
|
Feb
|
|
Jan
|
(US$ per tonne)
|
|
2008
|
|
2008
|
|
2008
|
|
2008
|
|
United States
|
|
|
|
532
|
|
|
|
632
|
|
|
|
698
|
|
|
|
832
|
|
Europe
2
|
|
|
|
465
|
|
|
|
772
|
|
|
|
772
|
|
|
|
772
|
|
Asia
|
|
|
|
450
|
|
|
|
525
|
|
|
|
600
|
|
|
|
720
|
|
|
|
|
|
1
|
|
Discounts from our posted prices are offered to customers based on various factors.
|
|
2
|
|
295 at April 2007 (Feb 2007
525) converted to United States dollars at the date
of settlement.
|
Overall, while demand growth for some derivatives, such as formaldehyde and biodiesel, has weakened
in some regions, we believe demand remains healthy in both traditional chemical derivatives and in
energy applications as high global energy prices continue to drive strong demand for fuel blending
and di-methyl ether (DME) in China. In addition, we believe that high energy prices are continuing
to support strong demand for MTBE in a period which usually experiences some seasonal weakness.
We believe methanol demand in China will continue to grow at high rates as a result of very strong
traditional demand driven by high industrial production growth rates and additional demand related
to non-traditional uses for methanol such as gasoline blending and DME. We also believe that there
is increasing pressure on the cost structure of the Chinese methanol industry and the cost to
export as a result of escalating feedstock costs for both coal and natural gas based producers in
China, the continued appreciation of the Chinese currency and reduced fiscal incentives offered to
Chinese exporters of methanol introduced during 2007. During the first quarter of 2008, China was a
net exporter of methanol as a result of the very high methanol price environment, which gave
producers in China the incentive to operate at higher production rates and export methanol. We
believe this was a key factor contributing to improving the global inventory position during the
first quarter of 2008. However, we believe that China has reverted back to a net importer of
methanol in April and this has been reflected in the recent strengthening of spot methanol prices
in China and other global markets. Due to the high cost position of many of the Chinese producers
and the fact that the majority of methanol produced in China is coal-based and not suitable for
many international customers, we believe in a lower price environment substantially all domestic
methanol production in China will be consumed within the local market and that imports of methanol
into China will grow over time.
LIQUIDITY AND CAPITAL RESOURCES
Cash flows from operating activities before changes in non-cash working capital in the first
quarter of 2008 were $102 million compared with $179 million for the same period in 2007. The
decrease in cash flows from operating activities before changes in non-cash working capital are
primarily the result of lower earnings during the first quarter of 2008.
During the first quarter of 2008, we repurchased 2.9 million common shares at an average price of
US$25.99 per share under our current normal course issuer bid that expires May 16, 2008. At March
31, 2008, we had repurchased a total of 7.2 million of the maximum available repurchase of 8.6
million common shares at an average price of US$25.95 per share under this bid.
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
MANAGEMENTS DISCUSSION AND ANALYSIS
|
|
PAGE 6
|
During the first quarter of 2008, we paid a quarterly dividend of US$0.14 per share, or $13
million.
We are constructing a 1.3 million tonne per year methanol facility at Damietta on the Mediterranean
Sea in Egypt. We expect commercial operations of the methanol facility to begin in early 2010 and
we will purchase and sell 100% of the methanol from the facility. We own 60% of Egyptian Methanex
Methanol Company S.A.E. (EMethanex) which is the company that is developing the project. We
account for our investment in EMethanex using consolidation accounting. This results in 100% of the
assets and liabilities of EMethanex being included in our financial statements. The other
investors interest in the project is presented as non-controlling interest. During the first
quarter of 2008, total plant and equipment construction costs related to our project in Egypt were
$96 million. EMethanex has limited recourse debt of $530 million. During the first quarter of 2008,
a total of $39 million of this limited recourse debt was drawn. The total estimated future costs to
complete the project over the next two years, excluding financing costs and working capital, are
expected to be approximately $600 million. Our 60% share of future equity contributions, excluding
financing costs and working capital, over the next two years is estimated to be approximately $165
million and we expect to fund these expenditures from cash generated from operations and cash on
hand.
We have excellent financial capacity and flexibility. Our cash balance at March 31, 2008 was $465
million and we have a strong balance sheet with an undrawn $250 million credit facility. We invest
our cash only in highly rated instruments that have maturities of three months or less to ensure
preservation of capital and appropriate liquidity. Our planned capital maintenance expenditure
program directed towards major maintenance, turnarounds and catalyst changes, including costs to
complete the restart of the Motunui facility, is currently estimated to total approximately $125
million for the period to the end of 2010.
We believe we are well positioned to meet financial requirements related to the methanol project in
Egypt, complete our capital maintenance spending program, complete the restart of the Motunui
facility, pursue new opportunities to enhance our leadership position in the methanol industry,
pursue investment opportunities to accelerate the development of natural gas in southern Chile,
investigate opportunities related to new methanol demand for energy applications, pursue other
strategic initiatives and continue to deliver on our commitment to return excess cash to
shareholders.
The credit ratings for our unsecured notes at March 31, 2008 were as follows:
|
|
|
|
|
Standard & Poors Rating Services
|
|
BBB
|
|
(stable)
|
Moodys Investor Services
|
|
Ba1
|
|
(stable)
|
Fitch Ratings
|
|
BBB
|
|
(stable)
|
Credit ratings are not recommendations to purchase, hold or sell securities and do
not comment on market price or suitability for a particular investor. There is no
assurance that any rating will remain in effect for any given period of time or
that any rating will not be revised or withdrawn entirely by a rating agency in the
future.
SHORT-TERM OUTLOOK
We believe that global inventories have improved and this has resulted in a moderation of methanol
pricing into the second quarter of 2008. Over the next year, we believe that traditional and
non-traditional growth, along with closures of high cost capacity, will substantially offset the
new supply that is scheduled to start up over the coming year and that supply/demand fundamentals
will be in reasonable balance during 2008. We also believe that methanol prices will be underpinned
by strong demand in China and global energy prices.
The methanol price will ultimately depend on industry operating rates, global energy prices, the
rate of industry restructuring and the strength of global demand. We believe that our excellent
financial position and financial flexibility, outstanding global supply network and low cost
position will provide a sound basis for Methanex continuing to be the leader in the methanol
industry.
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
MANAGEMENTS DISCUSSION AND ANALYSIS
|
|
PAGE 7
|
CHANGES IN ACCOUNTING POLICIES OR ESTIMATES
On January 1, 2008, we adopted the Canadian Institute of Chartered Accountants (CICA) Handbook
Section 3031
Inventories
, Section 1535
Capital Disclosures
, Section 3862
Financial Instruments -
Disclosure
and Section 3863
Financial Instruments Presentation.
These standards are discussed in
Notes 2, 3, 12, 13 and 14 to our interim consolidated financial statements.
CONTROLS AND PROCEDURES
For the three months ended March 31, 2008, no changes were made in our internal control over
financial reporting that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
ADDITIONAL INFORMATION SUPPLEMENTAL NON-GAAP MEASURES
In addition to providing measures prepared in accordance with Canadian generally accepted
accounting principles (Canadian GAAP), we present certain supplemental non-GAAP measures. These are
Adjusted EBITDA, operating income and cash flows from operating activities before changes in
non-cash working capital. These measures do not have any standardized meaning prescribed by
Canadian GAAP and therefore are unlikely to be comparable to similar measures presented by other
companies. We believe these measures are useful in evaluating the operating performance and
liquidity of the Companys ongoing business. These measures should be considered in addition to,
and not as a substitute for, net income, cash flows and other measures of financial performance and
liquidity reported in accordance with Canadian GAAP.
Adjusted EBITDA
This supplemental non-GAAP measure is provided to assist readers in determining our ability to
generate cash from operations. We believe this measure is useful in assessing performance and
highlighting trends on an overall basis. We also believe Adjusted EBITDA is frequently used by
securities analysts and investors when comparing our results with those of other companies.
Adjusted EBITDA differs from the most comparable GAAP measure, cash flows from operating
activities, primarily because it does not include changes in non-cash working capital, other cash
payments related to operating activities, stock-based compensation expense, other non-cash items,
interest expense, interest and other income (expense), and current income taxes.
The following table shows a reconciliation of cash flows from operating activities to Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Mar 31
|
|
Dec 31
|
|
Mar 31
|
($ thousands)
|
|
2008
|
|
2007
|
|
2007
|
|
Cash flows from operating activities
|
|
|
$
|
110,586
|
|
|
$
|
79,911
|
|
|
$
|
191,102
|
|
Add (deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in non-cash working capital
|
|
|
|
(8,267
|
)
|
|
|
107,923
|
|
|
|
(12,109
|
)
|
Other cash payments
|
|
|
|
320
|
|
|
|
11,938
|
|
|
|
740
|
|
Stock-based compensation expense
|
|
|
|
(4,628
|
)
|
|
|
(6,755
|
)
|
|
|
(3,522
|
)
|
Other non-cash items
|
|
|
|
(6,427
|
)
|
|
|
(3,105
|
)
|
|
|
(2,647
|
)
|
Interest expense
|
|
|
|
10,690
|
|
|
|
10,878
|
|
|
|
11,067
|
|
Interest and other income (expense)
|
|
|
|
837
|
|
|
|
(2,583
|
)
|
|
|
(5,072
|
)
|
Current income taxes
|
|
|
|
23,960
|
|
|
|
72,139
|
|
|
|
57,326
|
|
|
Adjusted EBITDA
|
|
|
$
|
127,071
|
|
|
$
|
270,346
|
|
|
$
|
236,885
|
|
|
Operating Income and Cash Flows from Operating Activities before Non-Cash Working Capital
Operating income and cash flows from operating activities before changes in non-cash working
capital are reconciled to Canadian GAAP measures in our consolidated statements of income and
consolidated statements of cash flows, respectively.
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
MANAGEMENTS DISCUSSION AND ANALYSIS
|
|
PAGE 8
|
QUARTERLY FINANCIAL DATA (UNAUDITED)
A summary of selected financial information for the prior eight quarters is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Mar 31
|
|
Dec 31
|
|
Sep 30
|
|
Jun 30
|
($ thousands, except per share amounts)
|
|
2008
|
|
2007
|
|
2007
|
|
2007
|
|
Revenue
|
|
|
$
|
735,934
|
|
|
$
|
731,057
|
|
|
$
|
395,118
|
|
|
$
|
466,414
|
|
Net income
|
|
|
|
65,484
|
|
|
|
171,697
|
|
|
|
23,610
|
|
|
|
35,654
|
|
Basic net income per common share
|
|
|
|
0.67
|
|
|
|
1.74
|
|
|
|
0.24
|
|
|
|
0.35
|
|
Diluted net income per common share
|
|
|
|
0.67
|
|
|
|
1.72
|
|
|
|
0.24
|
|
|
|
0.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Mar 31
|
|
Dec 31
|
|
Sep 30
|
|
Jun 30
|
($ thousands, except per share amounts)
|
|
2007
|
|
2006
|
|
2006
|
|
2006
|
|
Revenue
|
|
|
$
|
673,932
|
|
|
$
|
668,159
|
|
|
$
|
519,586
|
|
|
$
|
460,915
|
|
Net income
|
|
|
|
144,706
|
|
|
|
172,445
|
|
|
|
113,230
|
|
|
|
82,097
|
|
Basic net income per common share
|
|
|
|
1.38
|
|
|
|
1.62
|
|
|
|
1.05
|
|
|
|
0.75
|
|
Diluted net income per common share
|
|
|
|
1.37
|
|
|
|
1.61
|
|
|
|
1.05
|
|
|
|
0.75
|
|
|
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
MANAGEMENTS DISCUSSION AND ANALYSIS
|
|
PAGE 9
|
HOW WE ANALYZE OUR BUSINESS
We review our results of operations by analyzing changes in the components of our Adjusted EBITDA
(refer to
Supplemental Non-GAAP Measures
for a reconciliation to the most comparable GAAP measure),
depreciation and amortization, interest expense, interest and other income, unusual items and
income taxes. In addition to the methanol that we produce at our facilities, we also purchase and
re-sell methanol produced by others. We analyze the results of produced methanol sales separately
from purchased methanol sales as the margin characteristics of each are very different.
Methanex-Produced Methanol
Our production facilities generate the substantial portion of our Adjusted EBITDA, and accordingly,
the key drivers of changes in our Adjusted EBITDA for produced methanol are analyzed separately.
The key drivers of changes in our Adjusted EBITDA for produced methanol are average realized price,
sales volume and cash costs. Changes in Adjusted EBITDA related to our produced methanol include
our sales of methanol from our facilities in Chile, Trinidad and New Zealand.
The price, cash cost and volume variances included in our Adjusted EBITDA analysis for produced
methanol are defined and calculated as follows:
|
|
|
PRICE
|
|
The change in Adjusted EBITDA as a result of changes in average
realized price is calculated as the difference from period to
period in the selling price of produced methanol multiplied by the
current period sales volume of produced methanol. Sales under
long-term contracts where the prices are either fixed or linked to
our costs plus a margin are included as sales of produced methanol.
Accordingly, the selling price of produced methanol will differ
from the selling price of purchased methanol.
|
|
|
|
COST
|
|
The change in our Adjusted EBITDA as a result of changes in cash
costs is calculated as the difference from period to period in cash
costs per tonne multiplied by the sales volume of produced methanol
in the current period plus the change in unabsorbed fixed cash
costs. The change in consolidated selling, general and
administrative expenses and fixed storage and handling costs are
included in the analysis of produced methanol.
|
|
|
|
VOLUME
|
|
The change in Adjusted EBITDA as a result of changes in sales
volumes is calculated as the difference from period to period in
the sales volumes of produced methanol multiplied by the margin per
tonne for the prior period. The margin per tonne is calculated as
the selling price per tonne of produced methanol less absorbed
fixed cash costs per tonne and variable cash costs per tonne
(excluding Argentina natural gas export duties per tonne).
|
Purchased Methanol
The cost of sales of purchased methanol consists principally of the cost of the methanol itself,
which is directly related to the price of methanol at the time of purchase. Accordingly, the
analysis of purchased methanol and its impact on our Adjusted EBITDA is discussed on a net margin
basis.
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
MANAGEMENTS DISCUSSION AND ANALYSIS
|
|
PAGE 10
|
FORWARD-LOOKING STATEMENTS
Information contained in this First Quarter 2008 Managements Discussion and Analysis contains
forward-looking statements. Certain material factors or assumptions were applied in drawing the
conclusions or making the forecasts or projections that are included in these forward-looking
statements. Methanex believes that it has a reasonable basis for making such forward-looking
statements. However, forward-looking statements, by their nature, involve risks and uncertainties
that could cause actual results to differ materially from those contemplated by the forward-looking
statements. The risks and uncertainties include those attendant with producing and marketing
methanol and successfully carrying out major capital expenditure projects in various jurisdictions,
the ability to successfully carry out corporate initiatives and strategies, conditions in the
methanol and other industries including the supply and demand balance for methanol, the success of
natural gas exploration and development activities in southern Chile and our ability to obtain any
additional gas in that region on commercially acceptable terms, actions of competitors and
suppliers, actions of governments and governmental authorities, changes in laws or regulations in
foreign jurisdictions, world-wide economic conditions and other risks described in our 2007
Managements Discussion & Analysis and this First Quarter 2008 Managements Discussion and
Analysis. Undue reliance should not be placed on forward-looking statements. They are not a
substitute for the exercise of ones own due diligence and judgment. The outcomes anticipated in
forward-looking statements may not occur and we do not undertake to update forward-looking
statements.
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
MANAGEMENTS DISCUSSION AND ANALYSIS
|
|
PAGE 11
|
Methanex Corporation
Consolidated Statements of Income
(unaudited)
(thousands of US dollars, except number of common shares and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Mar 31
|
|
|
Mar 31
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
735,934
|
|
|
$
|
673,932
|
|
|
|
|
|
|
|
|
|
|
Cost of sales and operating expenses
|
|
|
608,863
|
|
|
|
437,047
|
|
Depreciation and amortization
|
|
|
23,113
|
|
|
|
23,739
|
|
|
Operating income before undernoted items
|
|
|
103,958
|
|
|
|
213,146
|
|
Interest expense (note 7)
|
|
|
(10,690
|
)
|
|
|
(11,067
|
)
|
Interest and other income (expense)
|
|
|
(837
|
)
|
|
|
5,072
|
|
|
Income before income taxes
|
|
|
92,431
|
|
|
|
207,151
|
|
Income taxes:
|
|
|
|
|
|
|
|
|
Current
|
|
|
(23,960
|
)
|
|
|
(57,326
|
)
|
Future
|
|
|
(2,987
|
)
|
|
|
(5,119
|
)
|
|
|
|
|
(26,947
|
)
|
|
|
(62,445
|
)
|
|
Net income
|
|
$
|
65,484
|
|
|
$
|
144,706
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.67
|
|
|
$
|
1.38
|
|
Diluted
|
|
$
|
0.67
|
|
|
$
|
1.37
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
97,155,124
|
|
|
|
105,104,712
|
|
Diluted
|
|
|
97,534,095
|
|
|
|
105,597,445
|
|
|
|
|
|
|
|
|
|
|
Number of common shares outstanding at period end
|
|
|
95,588,767
|
|
|
|
104,199,092
|
|
See accompanying notes to consolidated financial statements.
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
CONSOLIDATED FINANCIAL STATEMENTS
|
|
PAGE 12
|
Methanex Corporation
Consolidated Balance Sheets
(unaudited)
(thousands of US dollars)
|
|
|
|
|
|
|
|
|
|
|
Mar 31
|
|
|
Dec 31
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
465,164
|
|
|
$
|
488,224
|
|
Receivables
|
|
|
299,512
|
|
|
|
401,843
|
|
Inventories
|
|
|
348,332
|
|
|
|
312,143
|
|
Prepaid expenses
|
|
|
37,506
|
|
|
|
20,889
|
|
|
|
|
|
1,150,514
|
|
|
|
1,223,099
|
|
Property, plant and equipment (note 4)
|
|
|
1,620,856
|
|
|
|
1,542,100
|
|
Other assets
|
|
|
112,033
|
|
|
|
104,700
|
|
|
|
|
$
|
2,883,403
|
|
|
$
|
2,869,899
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS EQUITY
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
438,637
|
|
|
$
|
466,020
|
|
Current maturities on long-term debt (note 6)
|
|
|
15,282
|
|
|
|
15,282
|
|
Current maturities on other long-term liabilities
|
|
|
17,604
|
|
|
|
16,965
|
|
|
|
|
|
471,523
|
|
|
|
498,267
|
|
Long-term debt (note 6)
|
|
|
621,008
|
|
|
|
581,987
|
|
Other long-term liabilities
|
|
|
88,003
|
|
|
|
74,431
|
|
Future income tax liabilities
|
|
|
341,589
|
|
|
|
338,602
|
|
Non-controlling interest
|
|
|
54,858
|
|
|
|
41,258
|
|
Shareholders equity:
|
|
|
|
|
|
|
|
|
Capital stock
|
|
|
441,727
|
|
|
|
451,640
|
|
Contributed surplus
|
|
|
18,138
|
|
|
|
16,021
|
|
Retained earnings
|
|
|
867,373
|
|
|
|
876,348
|
|
Accumulated other comprehensive loss
|
|
|
(20,816
|
)
|
|
|
(8,655
|
)
|
|
|
|
|
1,306,422
|
|
|
|
1,335,354
|
|
|
|
|
$
|
2,883,403
|
|
|
$
|
2,869,899
|
|
|
See accompanying notes to consolidated financial statements.
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
CONSOLIDATED FINANCIAL STATEMENTS
|
|
PAGE 13
|
Methanex Corporation
Consolidated Statements of Shareholders Equity
(unaudited)
(thousands of US dollars, except number of common shares)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
Total
|
|
|
|
Common
|
|
|
|
Capital
|
|
|
Contributed
|
|
|
Retained
|
|
|
Comprehensive
|
|
|
|
Shareholders
|
|
|
|
Shares
|
|
|
|
Stock
|
|
|
Surplus
|
|
|
Earnings
|
|
|
Loss
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Balance, December 31, 2006
|
|
|
105,800,942
|
|
|
|
$
|
474,739
|
|
|
$
|
10,346
|
|
|
$
|
724,166
|
|
|
$
|
|
|
|
|
$
|
1,209,251
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
375,667
|
|
|
|
|
|
|
|
|
375,667
|
|
Compensation expense recorded
for stock options
|
|
|
|
|
|
|
|
|
|
|
|
9,343
|
|
|
|
|
|
|
|
|
|
|
|
|
9,343
|
|
Issue of shares on exercise of
stock options
|
|
|
552,175
|
|
|
|
|
9,520
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,520
|
|
Reclassification of grant date
fair value on exercise of
stock options
|
|
|
|
|
|
|
|
3,668
|
|
|
|
(3,668
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments for shares repurchased
|
|
|
(8,042,863
|
)
|
|
|
|
(36,287
|
)
|
|
|
|
|
|
|
(168,440
|
)
|
|
|
|
|
|
|
|
(204,727
|
)
|
Dividend payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(55,045
|
)
|
|
|
|
|
|
|
|
(55,045
|
)
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8,655
|
)
|
|
|
|
(8,655
|
)
|
|
|
|
|
|
|
|
Balance, December 31, 2007
|
|
|
98,310,254
|
|
|
|
|
451,640
|
|
|
|
16,021
|
|
|
|
876,348
|
|
|
|
(8,655
|
)
|
|
|
|
1,335,354
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65,484
|
|
|
|
|
|
|
|
|
65,484
|
|
Compensation expense recorded
for stock options
|
|
|
|
|
|
|
|
|
|
|
|
2,893
|
|
|
|
|
|
|
|
|
|
|
|
|
2,893
|
|
Issue of shares on exercise of
stock options
|
|
|
128,513
|
|
|
|
|
2,392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,392
|
|
Reclassification of grant date
fair value on exercise of
stock options
|
|
|
|
|
|
|
|
776
|
|
|
|
(776
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments for shares repurchased
|
|
|
(2,850,000
|
)
|
|
|
|
(13,081
|
)
|
|
|
|
|
|
|
(60,995
|
)
|
|
|
|
|
|
|
|
(74,076
|
)
|
Dividend payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13,464
|
)
|
|
|
|
|
|
|
|
(13,464
|
)
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12,161
|
)
|
|
|
|
(12,161
|
)
|
|
|
|
|
|
|
|
Balance, March 31, 2008
|
|
|
95,588,767
|
|
|
|
$
|
441,727
|
|
|
$
|
18,138
|
|
|
$
|
867,373
|
|
|
$
|
(20,816
|
)
|
|
|
$
|
1,306,422
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements.
Consolidated Statements of Comprehensive Income
(unaudited)
(thousands of US dollars)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Mar 31
|
|
|
Mar 31
|
|
|
|
2008
|
|
|
2007
|
|
|
Net income
|
|
$
|
65,484
|
|
|
$
|
144,706
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
Change in fair value of forward exchange contracts, net of tax (note 13)
|
|
|
(265
|
)
|
|
|
(380
|
)
|
Change in fair value of interest rate swap contracts, net of tax (note 13)
|
|
|
(11,896
|
)
|
|
|
|
|
|
|
|
|
(12,161
|
)
|
|
|
(380
|
)
|
|
Comprehensive income
|
|
$
|
53,323
|
|
|
$
|
144,326
|
|
|
See accompanying notes to consolidated financial statements.
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
CONSOLIDATED FINANCIAL STATEMENTS
|
|
PAGE 14
|
Methanex Corporation
Consolidated Statements of Cash Flows
(unaudited)
(thousands of US dollars)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Mar 31
|
|
|
Mar 31
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
65,484
|
|
|
$
|
144,706
|
|
Add (deduct) non-cash items:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
23,113
|
|
|
|
23,739
|
|
Future income taxes
|
|
|
2,987
|
|
|
|
5,119
|
|
Stock-based compensation expense
|
|
|
4,628
|
|
|
|
3,522
|
|
Other
|
|
|
6,427
|
|
|
|
2,647
|
|
Other cash payments
|
|
|
(320
|
)
|
|
|
(740
|
)
|
|
Cash flows from operating activities before undernoted
|
|
|
102,319
|
|
|
|
178,993
|
|
Changes in non-cash working capital (note 11)
|
|
|
8,267
|
|
|
|
12,109
|
|
|
|
|
|
110,586
|
|
|
|
191,102
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Payments for shares repurchased
|
|
|
(74,076
|
)
|
|
|
(45,272
|
)
|
Dividend payments
|
|
|
(13,464
|
)
|
|
|
(13,072
|
)
|
Proceeds from limited recourse debt (note 6)
|
|
|
39,000
|
|
|
|
|
|
Equity contribution by non-controlling interest
|
|
|
13,600
|
|
|
|
10,850
|
|
Repayment of limited recourse debt
|
|
|
(312
|
)
|
|
|
|
|
Proceeds on issue of shares on exercise of stock options
|
|
|
2,392
|
|
|
|
2,139
|
|
Changes in debt service reserve accounts
|
|
|
|
|
|
|
2,476
|
|
Repayment of other long-term liabilities
|
|
|
(4,998
|
)
|
|
|
(1,010
|
)
|
|
|
|
|
(37,858
|
)
|
|
|
(43,889
|
)
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
|
(8,151
|
)
|
|
|
(13,676
|
)
|
Plant and equipment construction costs
|
|
|
(96,211
|
)
|
|
|
(8,586
|
)
|
GeoPark financing included in other assets
|
|
|
(11,390
|
)
|
|
|
|
|
Other assets
|
|
|
306
|
|
|
|
45
|
|
Changes in non-cash working capital (note 11)
|
|
|
19,658
|
|
|
|
347
|
|
|
|
|
|
(95,788
|
)
|
|
|
(21,870
|
)
|
|
Increase (decrease) in cash and cash equivalents
|
|
|
(23,060
|
)
|
|
|
125,343
|
|
Cash and cash equivalents, beginning of period
|
|
|
488,224
|
|
|
|
355,054
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
465,164
|
|
|
$
|
480,397
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTARY CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
16,989
|
|
|
$
|
13,423
|
|
Income taxes paid, net of amounts refunded
|
|
$
|
28,148
|
|
|
$
|
29,120
|
|
See accompanying notes to consolidated financial statements.
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
CONSOLIDATED FINANCIAL STATEMENTS
|
|
PAGE 15
|
Methanex Corporation
Notes to Consolidated Financial Statements
(unaudited)
Except where otherwise noted, tabular dollar amounts are stated in thousands of US dollars.
1.
|
|
Basis of presentation
|
|
|
|
These interim consolidated financial statements are prepared in accordance with generally
accepted accounting principles in Canada on a basis consistent with those followed in the most
recent annual consolidated financial statements, except as described in Note 2 below. These
accounting principles are different in some respects from those generally accepted in the United
States and the significant differences are described and reconciled in Note 15. These interim
consolidated financial statements do not include all note disclosures required by Canadian
generally accepted accounting principles for annual financial statements, and therefore should
be read in conjunction with the annual consolidated financial statements included in the
Methanex Corporation 2007 Annual Report.
|
|
2.
|
|
Changes in accounting policies
|
|
|
|
On January 1, 2008, the Company adopted the Canadian Institute of Chartered Accountants (CICA)
Handbook Section 3031
Inventories
, Section 1535
Capital Disclosures
, Section 3862
Financial
Instruments Disclosure
and Section 3863
Financial Instruments Presentation
. Section 3031
provides more extensive guidance on the measurement and disclosure of inventory. The adoption of
this standard has had no impact on the Companys measurement of inventory. Section 1535
establishes standards for disclosing information about an entitys capital and how it is
managed. Sections 3862 and 3863 revise and enhance disclosure and presentation of financial
instruments and place increased emphasis on disclosures about the nature and extent of risks
arising from financial instruments and how those risks are managed.
|
|
3.
|
|
Inventories
|
|
|
|
Inventories are valued at the lower of cost, determined on a first-in first-out basis, and
estimated net realizable value. The amount of inventories included in cost of sales and
operating expense and depreciation and amortization during the three months ended March 31, 2008
was $573 million (2007 $408 million).
|
|
4.
|
|
Property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
Net Book
|
|
|
|
Cost
|
|
|
Depreciation
|
|
|
Value
|
|
|
March 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant and equipment
|
|
$
|
2,457,040
|
|
|
$
|
1,229,619
|
|
|
$
|
1,227,421
|
|
Egypt plant under construction
|
|
|
323,994
|
|
|
|
|
|
|
|
323,994
|
|
Other
|
|
|
126,033
|
|
|
|
56,592
|
|
|
|
69,441
|
|
|
|
|
$
|
2,907,067
|
|
|
$
|
1,286,211
|
|
|
$
|
1,620,856
|
|
|
December 31, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant and equipment
|
|
$
|
2,450,175
|
|
|
$
|
1,206,730
|
|
|
$
|
1,243,445
|
|
Egypt plant under construction
|
|
|
227,783
|
|
|
|
|
|
|
|
227,783
|
|
Other
|
|
|
124,779
|
|
|
|
53,907
|
|
|
|
70,872
|
|
|
|
|
$
|
2,802,737
|
|
|
$
|
1,260,637
|
|
|
$
|
1,542,100
|
|
|
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
PAGE 16
|
5.
|
|
Interest in Atlas joint venture
|
|
|
|
The Company has a 63.1% joint venture interest in Atlas Methanol Company (Atlas). Atlas owns a
1.7 million tonne per year methanol production facility in Trinidad. Included in the
consolidated financial statements are the following amounts representing the Companys
proportionate interest in Atlas:
|
|
|
|
|
|
|
|
|
|
|
|
Mar 31
|
|
|
Dec 31
|
|
Consolidated Balance Sheets
|
|
2008
|
|
|
2007
|
|
|
Cash and cash equivalents
|
|
$
|
44,516
|
|
|
$
|
20,128
|
|
Other current assets
|
|
|
105,451
|
|
|
|
107,993
|
|
Property, plant and equipment
|
|
|
259,998
|
|
|
|
263,942
|
|
Other assets
|
|
|
16,329
|
|
|
|
16,329
|
|
Accounts payable and accrued liabilities
|
|
|
67,740
|
|
|
|
56,495
|
|
Long-term debt, including current maturities (note 6)
|
|
|
120,082
|
|
|
|
119,891
|
|
Future income tax liabilities
|
|
|
17,021
|
|
|
|
16,099
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Mar 31
|
|
|
Mar 31
|
|
Consolidated Statements of Income
|
|
2008
|
|
|
2007
|
|
|
Revenue
|
|
$
|
82,077
|
|
|
$
|
66,334
|
|
Expenses
|
|
|
74,634
|
|
|
|
58,289
|
|
|
Income before income taxes
|
|
|
7,443
|
|
|
|
8,045
|
|
Income tax expense
|
|
|
(1,902
|
)
|
|
|
(1,673
|
)
|
|
Net income
|
|
$
|
5,541
|
|
|
$
|
6,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Mar 31
|
|
|
Mar 31
|
|
Consolidated Statements of Cash Flows
|
|
2008
|
|
|
2007
|
|
|
Cash inflows from operating activities
|
|
$
|
24,554
|
|
|
$
|
27,038
|
|
Cash inflows from financing activities
|
|
|
|
|
|
|
2,476
|
|
Cash outflows from investing activities
|
|
|
(166
|
)
|
|
|
(9,958
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Mar 31
|
|
|
Dec 31
|
|
|
|
2008
|
|
|
2007
|
|
|
Unsecured notes
|
|
|
|
|
|
|
|
|
8.75% due August 15, 2012
|
|
$
|
197,874
|
|
|
$
|
197,776
|
|
6.00% due August 15, 2015
|
|
|
148,384
|
|
|
|
148,340
|
|
|
|
|
|
346,258
|
|
|
|
346,116
|
|
Atlas limited recourse debt facilities
|
|
|
120,082
|
|
|
|
119,891
|
|
Egypt limited recourse debt facilities
|
|
|
155,574
|
|
|
|
116,574
|
|
Other limited recourse debt facilities
|
|
|
14,376
|
|
|
|
14,688
|
|
|
|
|
|
636,290
|
|
|
|
597,269
|
|
Less current maturities
|
|
|
(15,282
|
)
|
|
|
(15,282
|
)
|
|
|
|
$
|
621,008
|
|
|
$
|
581,987
|
|
|
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
PAGE 17
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Mar 31
|
|
|
Mar 31
|
|
|
|
2008
|
|
|
2007
|
|
|
Interest expense before capitalized interest
|
|
$
|
13,855
|
|
|
$
|
11,067
|
|
Less: capitalized interest related to Egypt project
|
|
|
(3,165
|
)
|
|
|
|
|
|
Interest expense
|
|
$
|
10,690
|
|
|
$
|
11,067
|
|
|
|
|
In 2007, the Company reached financial close and secured limited recourse debt of $530 million
for its joint venture project to construct a 1.3 million tonne per year methanol facility in
Egypt. For the three months ended March 31, 2008, interest costs related to this project of $3.2
million were capitalized.
|
|
8.
|
|
Net income per common share:
|
|
|
|
A reconciliation of the weighted average number of common shares outstanding is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Mar 31
|
|
|
Mar 31
|
|
|
|
2008
|
|
|
2007
|
|
|
Denominator for basic net income per common share
|
|
|
97,155,124
|
|
|
|
105,104,712
|
|
Effect of dilutive stock options
|
|
|
378,971
|
|
|
|
492,733
|
|
|
Denominator for diluted net income per common share
|
|
|
97,534,095
|
|
|
|
105,597,445
|
|
|
9.
|
|
Stock-based compensation:
|
|
(i)
|
|
Incentive stock options:
|
|
|
|
|
Common shares reserved for outstanding incentive stock options at March 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options Denominated in CAD $
|
|
|
Options Denominated in US $
|
|
|
|
Number of
|
|
|
Weighted Average
|
|
|
Number of
|
|
|
Weighted Average
|
|
|
|
Stock Options
|
|
|
Exercise Price
|
|
|
Stock Options
|
|
|
Exercise Price
|
|
|
Outstanding at December 31, 2007
|
|
|
104,450
|
|
|
|
$ 7.79
|
|
|
|
2,920,981
|
|
|
|
$ 21.17
|
|
Granted
|
|
|
|
|
|
|
|
|
|
|
1,078,068
|
|
|
|
28.43
|
|
Exercised
|
|
|
(19,750
|
)
|
|
|
9.99
|
|
|
|
(103,763
|
)
|
|
|
19.95
|
|
Cancelled
|
|
|
(7,000
|
)
|
|
|
11.60
|
|
|
|
(3,666
|
)
|
|
|
23.36
|
|
|
Outstanding at March 31, 2008
|
|
|
77,700
|
|
|
|
$ 6.89
|
|
|
|
3,891,620
|
|
|
|
$ 23.21
|
|
|
Information regarding the incentive stock options outstanding at March 31, 2008 is as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options Outstanding at
|
|
Options Exercisable at
|
|
|
|
March 31, 2008
|
|
March 31, 3008
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
Weighted
|
|
|
|
Remaining
|
|
Number of
|
|
Average
|
|
Number of
|
|
Average
|
|
|
|
Contractual Life
|
|
Stock Options
|
|
Exercise
|
|
Stock Options
|
|
Exercise
|
|
Range of Exercise Prices
|
|
(Years)
|
|
Outstanding
|
|
Price
|
|
Exercisable
|
|
Price
|
|
|
Options denominated in CAD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$3.29 to 9.56
|
|
|
|
2.3
|
|
|
|
77,700
|
|
|
$
|
6.89
|
|
|
|
77,700
|
|
|
$
|
6.89
|
|
|
Options denominated in USD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$6.45 to 11.56
|
|
|
|
4.7
|
|
|
|
196,500
|
|
|
$
|
8.61
|
|
|
|
196,500
|
|
|
$
|
8.61
|
|
$17.85 to 22.52
|
|
|
|
4.7
|
|
|
|
1,548,100
|
|
|
|
20.23
|
|
|
|
1,045,866
|
|
|
|
19.96
|
|
$23.92 to 28.43
|
|
|
|
6.4
|
|
|
|
2,147,020
|
|
|
|
26.70
|
|
|
|
346,263
|
|
|
|
24.95
|
|
|
|
|
|
|
5.7
|
|
|
|
3,891,620
|
|
|
$
|
23.21
|
|
|
|
1,588,629
|
|
|
$
|
19.64
|
|
|
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
PAGE 18
|
9.
|
|
Stock-based compensation (continued):
|
|
(ii)
|
|
Performance stock options:
|
|
|
|
|
As at March 31, 2008, there were 45,000 shares (December 31, 2007 50,000 shares)
reserved for performance stock options with an exercise price of CAD $4.47. All
outstanding performance stock options have vested and are exercisable.
|
|
|
(iii)
|
|
Compensation expense related to stock options:
|
|
|
|
|
For the three months ended March 31, 2008, compensation expense related to stock options
included in cost of sales and operating expenses was $2.9 million (2007 $2.6 million).
The fair value of each stock option grant was estimated on the date of grant using the
Black-Scholes option pricing model with the following assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Risk-free interest rate
|
|
|
2.5%
|
|
|
|
4.5%
|
|
Expected dividend yield
|
|
|
2%
|
|
|
|
2%
|
|
Expected life
|
|
5 years
|
|
|
5 years
|
|
Expected volatility
|
|
|
32%
|
|
|
|
31%
|
|
Expected forfeitures
|
|
|
5%
|
|
|
|
5%
|
|
Weighted average fair value of options granted (USper share)
|
|
$
|
7.52
|
|
|
$
|
7.06
|
|
|
|
b)
|
|
Deferred, restricted and performance share units:
|
|
|
|
|
Deferred, restricted and performance share units outstanding at March 31, 2008 are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Number of
|
|
|
|
Deferred
|
|
|
Restricted
|
|
|
Performance
|
|
|
|
Share Units
|
|
|
Share Units
|
|
|
Share Units
|
|
|
Outstanding at December 31, 2007
|
|
|
359,684
|
|
|
|
14,482
|
|
|
|
725,262
|
|
Granted
|
|
|
28,942
|
|
|
|
6,000
|
|
|
|
330,993
|
|
Granted in-lieu of dividends
|
|
|
2,462
|
|
|
|
106
|
|
|
|
5,481
|
|
Redeemed
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancelled
|
|
|
|
|
|
|
|
|
|
|
(8,908
|
)
|
|
Outstanding at March 31, 2008
|
|
|
391,088
|
|
|
|
20,588
|
|
|
|
1,052,828
|
|
|
Compensation expense for deferred, restricted and performance share units is initially
measured at fair value based on the market value of the Companys common shares and is
recognized over the related service period. Changes in fair value are recognized in earnings
for the proportion of the service that has been rendered at each reporting date. The fair
value of deferred, restricted and performance share units at March 31, 2008 was $33.1
million compared with the recorded liability of $23.5 million. The difference between the
fair value and the recorded liability of $9.6 million will be recognized over the weighted
average remaining service period of approximately 1.7 years.
For the three months ended March 31, 2008, compensation expense related to deferred,
restricted and performance share units included in cost of sales and operating expenses was
$1.7 million (2007 $0.9 million). For the three months ended March 31, 2008, the
compensation expense included a recovery of $1.7 million (2007 recovery of $1.8 million)
related to the effect of the change in the Companys share price. As at March 31, 2008, the
Companys share price was US$26.17 per share.
10.
|
|
Retirement plans:
|
|
|
|
Total net pension expense for the Companys defined benefit and defined contribution pension
plans during the three months ended March 31, 2008 was $1.9 million (2007 $1.9 million).
|
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
PAGE 19
|
11.
|
|
Changes in non-cash working capital:
|
|
|
|
The change in cash flows related to changes in non-cash working capital for the three months
ended March 31, 2008 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Mar 31
|
|
|
Mar 31
|
|
|
|
2008
|
|
|
2007
|
|
|
Decrease (increase) in non-cash working capital:
|
|
|
|
|
|
|
|
|
Receivables
|
|
$
|
102,331
|
|
|
$
|
43,278
|
|
Inventories
|
|
|
(36,189
|
)
|
|
|
(30,655
|
)
|
Prepaid expenses
|
|
|
(16,617
|
)
|
|
|
2,932
|
|
Accounts payable and accrued liabilities
|
|
|
(27,383
|
)
|
|
|
(5,634
|
)
|
|
|
|
|
22,142
|
|
|
|
9,921
|
|
Adjustments for items not having a cash effect
|
|
|
5,783
|
|
|
|
2,535
|
|
|
Changes in non-cash working capital having a cash effect
|
|
$
|
27,925
|
|
|
$
|
12,456
|
|
|
These changes relate to the following activities:
|
|
|
|
|
|
|
|
|
Operating
|
|
$
|
8,267
|
|
|
$
|
12,109
|
|
Investing
|
|
|
19,658
|
|
|
|
347
|
|
|
Changes in non-cash working capital
|
|
$
|
27,925
|
|
|
$
|
12,456
|
|
|
12.
|
|
Capital Disclosures:
|
|
|
|
The Companys objectives in managing its liquidity and capital are to safeguard the Companys
ability to continue as a going concern, to provide financial capacity and flexibility to meet
its strategic objectives, to provide an adequate return to shareholders commensurate with the
level of risk, and to return excess cash through a combination of dividends and share
repurchases.
|
|
|
|
|
|
|
|
|
|
|
|
Mar 31
|
|
|
Dec 31
|
|
|
|
2008
|
|
|
2007
|
|
|
Liquidity:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
465,164
|
|
|
$
|
488,224
|
|
Undrawn Egypt limited recourse debt facilities
|
|
|
374,426
|
|
|
|
413,426
|
|
Undrawn credit facilities
|
|
|
250,000
|
|
|
|
250,000
|
|
|
Total Liquidity
|
|
$
|
1,089,590
|
|
|
$
|
1,151,650
|
|
|
|
|
|
|
|
|
|
|
Capitalization:
|
|
|
|
|
|
|
|
|
Unsecured notes
|
|
$
|
346,258
|
|
|
$
|
346,116
|
|
Limited recourse debt facilities,
including current portion
|
|
|
290,032
|
|
|
|
251,153
|
|
|
Total debt
|
|
|
636,290
|
|
|
|
597,269
|
|
Non-controlling interest
|
|
|
54,858
|
|
|
|
41,258
|
|
Shareholders equity
|
|
|
1,306,422
|
|
|
|
1,335,354
|
|
|
Total capitalization
|
|
$
|
1,997,570
|
|
|
$
|
1,973,881
|
|
Total debt to capitalization
1
|
|
|
32%
|
|
|
|
30%
|
|
Net debt to capitalization
2
|
|
|
11%
|
|
|
|
7%
|
|
|
|
|
|
1
|
|
Total debt divided by total capitalization.
|
|
2
|
|
Total debt less cash and cash equivalents divided by total capitalization less cash
and cash equivalents.
|
The Company manages its liquidity and capital structure and makes adjustments to it in light of
changes to economic conditions, the underlying risks inherent in its operations and capital
requirements to maintain and grow its operations. The strategies employed by the Company include
the issue or repayment of general corporate debt, the issue of project debt, the payment of
dividends and the repurchase of shares.
The Company is not subject to any statutory capital requirements and has no commitments to sell
or otherwise issue common shares.
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
PAGE 20
|
12.
|
|
Capital Disclosures (continued):
|
|
|
|
The undrawn credit facility in the amount of $250 million is subject to certain financial
covenants including a debt to capitalization ratio as defined.
|
|
|
|
The credit ratings for our unsecured notes at March 31, 2008 were as follows:
|
|
|
|
|
Standard & Poors Rating Services
|
|
BBB
|
(stable)
|
Moodys Investor Services
|
|
Ba1
|
(stable)
|
Fitch Ratings
|
|
BBB
|
(stable)
|
13.
|
|
Financial Instruments:
|
|
|
|
Under CICA Section 3862
Financial Instruments Disclosures
, the Company is required to provide
disclosures regarding its financial instruments. Financial instruments are either measured at
amortized cost or fair value. Held-to-maturity investments, loans and receivables and other
financial liabilities are measured at amortized cost. Held for trading financial assets and
liabilities and available-for-sale financial assets are measured on the balance sheet at fair
value. Derivative financial instruments are classified as held for trading and are recorded on
the balance sheet at fair value unless exempted as a normal purchase and sale arrangement.
Changes in fair value of derivative financial instruments are recorded in earnings unless the
instruments are designated as cash flow hedges.
|
|
|
|
The following table provides the carrying value of each category of financial assets and
liabilities and the related balance sheet item:
|
|
|
|
|
|
|
|
|
|
|
|
Mar 31
|
|
|
Dec 31
|
|
|
|
2008
|
|
|
2007
|
|
|
Financial assets:
|
|
|
|
|
|
|
|
|
Held for trading financial assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
465,164
|
|
|
$
|
488,224
|
|
Derivative instruments
|
|
|
589
|
|
|
|
|
|
Debt service reserve accounts included in other assets
|
|
|
16,329
|
|
|
|
16,329
|
|
|
|
|
|
|
|
|
|
|
Loans and receivables:
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
299,512
|
|
|
|
401,843
|
|
GeoPark financing included in other assets
|
|
|
23,861
|
|
|
|
13,738
|
|
|
|
|
$
|
805,455
|
|
|
$
|
920,134
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
Other financial liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
438,637
|
|
|
$
|
466,020
|
|
Long-term debt, including current portion
|
|
|
636,290
|
|
|
|
597,269
|
|
Capital lease obligation included in
other long-term liabilities
|
|
|
23,579
|
|
|
|
24,676
|
|
|
|
|
|
|
|
|
|
|
Held for trading financial liabilities:
|
|
|
|
|
|
|
|
|
Derivative instruments designated as cash flow hedges
|
|
|
21,197
|
|
|
|
8,749
|
|
Derivative instruments
|
|
|
1,268
|
|
|
|
955
|
|
|
|
|
$
|
1,120,971
|
|
|
$
|
1,097,669
|
|
|
At March 31, 2008, all of the Companys financial instruments are recorded on the balance sheet
at amortized cost with the exception of cash and cash equivalents, derivative financial
instruments and debt service reserve accounts included in other assets which are recorded at
fair value.
The Egypt limited recourse debt facilities bear interest at LIBOR plus a spread. At March 31,
2008, the Companys derivative financial instruments designated as cash flow hedges included
interest rate swap contracts which swap the LIBOR-based interest payments on these debt
facilities to a fixed LIBOR rate of 5.1% on approximately half of the projected outstanding debt
for the period September 28, 2007 to March 31, 2015. As at March 31, 2008, these interest rate
swap contracts had outstanding notional amounts of $150 million. The maximum notional amount
under the term of the interest rate swap contracts is $266 million. The notional amount
increases over the period of expected draw-downs on the Egypt limited recourse debt and
decreases over the expected repayment period. At March 31, 2008, these interest rate swap
contracts had a negative fair value of $20.5 million (December 31, 2007 $8.6 million) which is
recorded in other long-term liabilities. The mark to market value of these interest rate swap
contracts will fluctuate until maturity. The Company also designates as cash flow hedges forward
exchange contracts to sell euro at a fixed
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
PAGE 21
|
13.
|
|
Financial Instruments (continued):
|
|
|
|
USD exchange rate. At March 31, 2008, the Company had outstanding forward exchange contracts
designated as cash flow hedges to sell euro at a fixed USD exchange rate with a negative fair
value of $0.7 million (December 31, 2007 $0.1 million) recorded in accounts payable and accrued liabilities. For the three months ended
March 31, 2008, the total unrealized amount of the change in fair value of these derivative
financial instruments with a hedging relationship was $12.6 million. The effective portion of
this change in fair value of $12.3 million, net of tax recovery of $0.2 million, was recorded to
other comprehensive loss. Additionally, the Company reclassified $0.1 million from other
comprehensive loss to net income related to the fair value of forward exchange contracts
designated as cash flow hedges at December 31, 2007 which settled during the three months ended
March 31, 2008.
|
|
|
|
At March 31, 2008, the Companys derivative financial instruments that have not been designated
as cash flow hedges included forward exchange contracts to purchase $28.5 million New Zealand
dollars at an exchange rate of $0.7477 with a positive fair value of $0.6 million (December 31,
2007 nil) which is recorded in receivables and a floating-for-fixed interest rate swap
contract with a negative fair value of $1.3 million (December 31, 2007 $1.0 million) recorded
in other long-term liabilities. For the three months ended March 31, 2008, the total change in
fair value of these derivative financial instruments was negative $0.3 million and this amount
was recorded to other expense.
|
|
14.
|
|
Financial Risk Management:
|
|
a)
|
|
Market risks
|
|
|
|
|
The Companys operations consist of the production and sale of methanol. Market fluctuations
may result in significant cash flow and profit volatility risk for the Company. Its
worldwide operating business as well as its investment and financing activities are affected
by changes in methanol and natural gas prices and interest and foreign exchange rates. The
Company seeks to manage and control these risks primarily through its regular operating and
financing activities and uses derivative instruments to hedge these risks when deemed
appropriate. This is not an exhaustive list of all risks, nor will the risk management
strategies eliminate these risks.
|
|
|
|
Methanol price risk
|
|
|
|
|
The methanol industry is a highly competitive commodity industry and methanol prices
fluctuate based on supply and demand fundamentals and other factors. Accordingly it is
important to maintain financial flexibility and we have adopted a prudent approach to
financial management by maintaining a strong balance sheet including back-up liquidity.
We have also entered into long-term contracts with certain customers where prices are
either fixed or linked to our costs plus a margin.
|
|
|
|
|
Natural gas price risk
|
|
|
|
|
Natural gas is the primary feedstock for the production of methanol and the Company has
entered into long-term natural gas supply contracts for its production facilities in
Chile, Trinidad and Egypt and shorter term natural gas supply contracts for its New
Zealand operations. These natural gas supply contracts include base and variable price
components to reduce the commodity price risk exposure. The variable price component is
adjusted by formulas related to methanol prices above a certain level.
|
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
PAGE 22
|
14.
|
|
Financial Risk Management (continued):
|
|
|
|
Interest rate risk
|
|
|
|
|
Interest rate risk is the risk that the Company suffers financial loss due to changes in
the value of an asset or liability or in the value of future cash flows due to movements
in interest rates.
|
|
|
|
|
The Companys interest rate risk exposure is mainly related to long term debt
obligations. Approximately two thirds of its debt obligations are subject to interest at
fixed rates. We also seek to limit this risk through the use of interest rate swaps
which allows us to hedge cash flow changes by swapping variable rates of interest into
fixed rates of interest.
|
|
|
|
|
|
|
|
Mar 31
|
|
Long-Term Debt
|
|
2008
|
|
|
Fixed interest rate debt:
|
|
|
|
|
Unsecured notes
|
|
$
|
346,258
|
|
Atlas limited recourse debt facilities (63.1% proportionate share)
|
|
|
76,283
|
|
|
|
|
$
|
422,541
|
|
Variable interest rate debt:
|
|
|
|
|
Atlas limited recourse debt facilities (63.1% proportionate share)
|
|
$
|
43,799
|
|
Egypt limited recourse debt facilities
|
|
|
155,574
|
|
Other limited recourse debt facilities
|
|
|
14,376
|
|
|
|
|
$
|
213,749
|
|
|
|
|
|
The Company has entered into interest rate swap contracts to hedge the variability in
LIBOR-based interest payments on its Egypt limited recourse debt facilities described in
note 13. The notional amount increases over the period of expected drawdowns on the
Egypt limited recourse debt and decreases over the expected repayment period. These
contracts swap the LIBOR-based interest payments to a fixed rate of 5.1% on
approximately half of the projected outstanding debt for the period September 28, 2007
to March 31, 2015. The net fair value of cash flow interest rate swaps was a $21.8
million liability as at March 31, 2008. The change in fair value of the interest rate
swaps assuming a 1% decrease in the interest rates along the yield curve was an increase
in the liability of $14.5 million as of March 31, 2008.
|
|
|
|
|
For fixed interest rate debt, a 100 basis point increase in interest rates would result
in a decrease in fair value of the debt of $20.0 million. For the variable interest rate
debt that is unhedged, a 100 basis point increase in interest rates would result in an
increase in annual interest payments of $0.6 million.
|
|
|
|
|
Foreign currency exchange rate risk
|
|
|
|
|
The Companys international operations expose the Company to foreign currency exchange
risks in the ordinary course of business. Accordingly, the Company has established a
policy which provides a framework for foreign currency management, hedging strategies
and defines the approved hedging instruments. The Company reviews all significant
exposures to foreign currencies arising from operating and investing activities and
hedges exposures if deemed appropriate.
|
|
|
|
|
The dominant currency in which we conduct business is the United States dollar, which is
also our reporting currency.
|
|
|
|
|
Methanol is a global commodity chemical which is priced in US dollars. In certain
jurisdictions, however, the transaction price is set either quarterly or monthly in
local currency. Accordingly, a portion of our revenue is transacted in Canadian dollars,
euros and to a lesser extent other currencies. For the period from when the price is set
in local currency to when the amount due is collected, we are exposed to declines in the
value of these currencies compared to the United States dollar, which could have the
effect of decreasing the United States dollar equivalent of our revenue. We also
purchase varying quantities of methanol for which the transaction currency is the euro
and to a lesser extent other currencies. In addition, some of our underlying
operating costs and capital expenditures are incurred in other currencies. We are
exposed to increases in the value of these currencies that could have the effect of
increasing the United States dollar equivalent of cost of sales and operating expenses
and capital expenditures.
|
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
PAGE 23
|
14.
|
|
Financial Risk Management (continued):
|
|
|
|
We have elected not to actively manage these exposures at this time except for our net
exposure to euro revenues which we hedge through forward exchange contracts each quarter
when the euro price for methanol is established.
|
|
|
|
|
As of March 31, 2008, we had a net working capital liability of $28.1 million in non-US
dollar currencies. Each 1% strengthening (weakening) of the US dollar against these
currencies would increase (decrease) the value of net working capital and pre-tax cash
flow by $0.3 million.
|
|
b)
|
|
Liquidity risk
|
|
|
|
|
Liquidity risk is the risk that the Company will not have sufficient funds to meet its
liabilities such as the settlement of financial debt and lease obligations and payment to
its suppliers. The Company maintains liquidity and makes adjustments to it in light of
changes to economic conditions, underlying risks inherent in its operations and capital
requirements to maintain and grow its operations. At March 31, 2008 the Company holds $465.2
million of cash and cash equivalents. In addition, the Company has an undrawn $250 million
credit facility that expires in 2010 provided by highly rated financial institutions.
|
|
|
|
|
In addition to the above mentioned sources of liquidity, the Company constantly monitors
funding options available in the capital markets, as well as trends in the availability and
costs of such funding, with a view to maintaining financial flexibility and limiting
refinancing risks.
|
|
|
c)
|
|
Credit risk
|
|
|
|
|
Counterparty credit risk is the risk that the financial benefits of contracts with a
specific counterparty will be lost if a counterparty defaults on its obligations under the
contract. This includes any cash amounts owed to the Company by those counterparties, less
any amounts owed to the counterparty by the Company where a legal right of set-off exists
and also includes the fair values of contracts with individual counterparties which are
recorded in the financial statements.
|
|
|
|
Trade credit risk
|
|
|
|
|
Trade credit risk is defined as an unexpected loss in cash and earnings if the customer
is unable to pay its obligations in due time or if the value of security provided
declines. The Company has implemented a credit policy which includes approvals for new
customers, annual credit evaluations of all customers and specific approval for any
exposures beyond approved limits. We employ a variety of risk mitigation alternatives
including certain contractual rights in the event of deterioration in customer credit
quality and various forms of bank and parent company guarantees and letters of credit to
upgrade the credit risk to a credit rating equivalent better than the stand-alone rating
of the counterparty. Historically trade credit losses have been minimal.
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
In order to manage credit and liquidity risk we invest only in highly rated investment
grade instruments that have maturities of three months or less. Limits are also
established based on the type of investment, the counterparty and the credit rating.
|
|
|
|
|
Derivative financial instruments
|
|
|
|
|
In order to manage credit risk, we only enter into derivative financial instruments with
highly rated investment grade counterparties.
|
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
PAGE 24
|
15.
|
|
United States Generally Accepted Accounting Principles:
|
|
|
|
The Company follows generally accepted accounting principles in Canada (Canadian GAAP) which
are different in some respects from those applicable in the United States and from practices
prescribed by the United States Securities and Exchange Commission (US GAAP).
|
|
|
|
The significant differences between Canadian GAAP and US GAAP with respect to the Companys
consolidated statements of income for the three months ended March 31, 2008 and 2007 are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Mar 31
|
|
|
Mar 31
|
|
|
|
2008
|
|
|
2007
|
|
|
Net income in accordance with Canadian GAAP
|
|
$
|
65,484
|
|
|
$
|
144,706
|
|
Add (deduct) adjustments for:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
a
|
|
|
(478
|
)
|
|
|
(478
|
)
|
Stock-based compensation
b
|
|
|
|
|
|
|
165
|
|
Uncertainty in income taxes
c
|
|
|
(415
|
)
|
|
|
(1,789
|
)
|
Income tax effect of above adjustments
d
|
|
|
168
|
|
|
|
168
|
|
|
Net income in accordance with US GAAP
|
|
$
|
64,759
|
|
|
$
|
142,772
|
|
|
|
|
|
|
|
|
|
|
|
Per share information in accordance with US GAAP:
|
|
|
|
|
|
|
|
|
Basic net income per share
|
|
$
|
0.67
|
|
|
$
|
1.36
|
|
Diluted net income per share
|
|
$
|
0.66
|
|
|
$
|
1.35
|
|
|
|
|
|
The significant differences between Canadian GAAP and US GAAP with respect to the Companys
consolidated statements of comprehensive income for the three months ended March 31, 2008 and
2007 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2008
|
|
|
March 31, 2007
|
|
|
|
Canadian GAAP
|
|
|
Adjustments
|
|
|
US GAAP
|
|
|
US GAAP
|
|
|
Net income
|
|
$
|
65,484
|
|
|
$
|
(725
|
)
|
|
$
|
64,759
|
|
|
$
|
142,772
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of forward exchange contracts, net of tax
|
|
|
(265
|
)
|
|
|
|
|
|
|
(265
|
)
|
|
|
(380
|
)
|
Change in fair value of interest rate swap, net of tax
|
|
|
(11,896
|
)
|
|
|
|
|
|
|
(11,896
|
)
|
|
|
|
|
Change related to pension, net of tax
e
|
|
|
|
|
|
|
241
|
|
|
|
241
|
|
|
|
225
|
|
|
Comprehensive income
|
|
$
|
53,323
|
|
|
$
|
(484
|
)
|
|
$
|
52,839
|
|
|
$
|
142,617
|
|
|
|
a)
|
|
Business combination:
|
|
|
|
|
Effective January 1, 1993, the Company combined its business with a methanol business
located in New Zealand and Chile. Under Canadian GAAP, the business combination was
accounted for using the pooling-of-interest method. Under US GAAP, the business combination
would have been accounted for as a purchase with the Company identified as the acquirer. For
the three months ended March 31, 2008, an adjustment to increase depreciation expense by
$0.5 million (2007 $0.5 million) was recorded in accordance with US GAAP.
|
|
|
b)
|
|
Stock-based compensation:
|
|
|
|
|
The Company has 22,350 stock options that are accounted for as variable plan options under
US GAAP because the exercise price of the stock options is denominated in a currency other
than the Companys functional currency or the currency in which the optionee is normally
compensated. For Canadian GAAP purposes, no compensation expense has been recorded as these
options were granted in 2001 which is prior to the effective implementation date for fair
value accounting under
Canadian GAAP. During the three months ended March 31, 2008, no adjustment to operating
expense (2007 decrease of $0.2 million) was recorded in accordance with US GAAP.
|
|
|
c)
|
|
Accounting for uncertainty in income taxes:
|
|
|
|
|
Effective January 1, 2007, the Company adopted Financial Accounting Standards Board (FASB)
Interpretation No. 48,
Accounting for Uncertainty in Income Taxes An Interpretation of
FASB Statement No. 109 (FIN48).
FIN 48 clarifies the accounting for income taxes recognized
in a Companys financial statements in accordance with FASB
|
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
PAGE 25
|
15.
|
|
United States Generally Accepted Accounting Principles (continued):
|
|
|
|
Statement No. 109,
Accounting for Income Taxes
(SFAS 109). FIN 48 prescribes a recognition
threshold and measurement attribute for the financial statement recognition and measurement
of a tax position taken or expected to be taken in a tax return. During the three months
ending March 31, 2008, an adjustment to increase income tax expense by $0.4 million (2007 -
$1.8 million) was recorded in accordance with US GAAP.
|
|
|
d)
|
|
Income tax accounting:
|
|
|
|
|
The income tax differences include the income tax effect of the adjustments related to
accounting differences between Canadian and US GAAP. During the three months ended March 31,
2008, this resulted in an adjustment to increase net income by $0.2 million (2007 $0.2
million).
|
|
|
e)
|
|
Defined benefit pension plans:
|
|
|
|
|
Effective January 1, 2006, US GAAP requires the Company to measure the funded status of a
defined benefit pension plan at its balance sheet reporting date and recognize the
unrecorded overfunded or underfunded status as an asset or liability with the change in that
unrecorded funded status recorded to other comprehensive income. Under US GAAP, all deferred
pension amounts from Canadian GAAP are reclassified to accumulated other comprehensive
income. During the three months ended March 31, 2008, this resulted in an increase to other
comprehensive income of $0.2 million (2007 $0.2 million) in accordance with US GAAP.
|
|
|
f)
|
|
Interest in Atlas joint venture:
|
|
|
|
|
US GAAP requires interests in joint ventures to be accounted for using the equity method.
Canadian GAAP requires proportionate consolidation of interests in joint ventures. The
Company has not made an adjustment in this reconciliation for this difference in accounting
principles because the impact of applying the equity method of accounting does not result in
any change to net income or shareholders equity. This departure from US GAAP is acceptable
for foreign private issuers under the practices prescribed by the United States Securities
and Exchange Commission.
|
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
PAGE 26
|
Methanex Corporation
Quarterly History
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2008
|
|
|
2007
|
|
|
Q4
|
|
|
Q3
|
|
|
Q2
|
|
|
Q1
|
|
|
2006
|
|
|
Q4
|
|
|
Q3
|
|
|
Q2
|
|
|
Q1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
METHANOL SALES VOLUMES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(thousands of tonnes)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company produced
|
|
|
678
|
|
|
|
4,569
|
|
|
|
997
|
|
|
|
1,073
|
|
|
|
1,360
|
|
|
|
1,139
|
|
|
|
5,310
|
|
|
|
1,160
|
|
|
|
1,478
|
|
|
|
1,351
|
|
|
|
1,321
|
|
Purchased methanol
|
|
|
669
|
|
|
|
1,453
|
|
|
|
421
|
|
|
|
387
|
|
|
|
269
|
|
|
|
376
|
|
|
|
1,101
|
|
|
|
288
|
|
|
|
222
|
|
|
|
294
|
|
|
|
297
|
|
Commission sales
1
|
|
|
143
|
|
|
|
590
|
|
|
|
195
|
|
|
|
168
|
|
|
|
89
|
|
|
|
138
|
|
|
|
584
|
|
|
|
134
|
|
|
|
176
|
|
|
|
133
|
|
|
|
141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,490
|
|
|
|
6,612
|
|
|
|
1,613
|
|
|
|
1,628
|
|
|
|
1,718
|
|
|
|
1,653
|
|
|
|
6,995
|
|
|
|
1,582
|
|
|
|
1,876
|
|
|
|
1,778
|
|
|
|
1,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
METHANOL PRODUCTION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(thousands of tonnes)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chile
|
|
|
309
|
|
|
|
1,841
|
|
|
|
288
|
|
|
|
233
|
|
|
|
569
|
|
|
|
751
|
|
|
|
3,186
|
|
|
|
766
|
|
|
|
666
|
|
|
|
872
|
|
|
|
882
|
|
Titan, Trinidad
|
|
|
217
|
|
|
|
861
|
|
|
|
220
|
|
|
|
191
|
|
|
|
225
|
|
|
|
225
|
|
|
|
864
|
|
|
|
229
|
|
|
|
206
|
|
|
|
214
|
|
|
|
215
|
|
Atlas, Trinidad (63.1%)
|
|
|
293
|
|
|
|
982
|
|
|
|
278
|
|
|
|
290
|
|
|
|
234
|
|
|
|
180
|
|
|
|
1,057
|
|
|
|
267
|
|
|
|
264
|
|
|
|
273
|
|
|
|
253
|
|
New Zealand
|
|
|
120
|
|
|
|
435
|
|
|
|
75
|
|
|
|
122
|
|
|
|
120
|
|
|
|
118
|
|
|
|
404
|
|
|
|
111
|
|
|
|
71
|
|
|
|
118
|
|
|
|
104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
939
|
|
|
|
4,119
|
|
|
|
861
|
|
|
|
836
|
|
|
|
1,148
|
|
|
|
1,274
|
|
|
|
5,511
|
|
|
|
1,373
|
|
|
|
1,207
|
|
|
|
1,477
|
|
|
|
1,454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE REALIZED METHANOL
PRICE
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($/tonne)
|
|
|
545
|
|
|
|
375
|
|
|
|
514
|
|
|
|
270
|
|
|
|
286
|
|
|
|
444
|
|
|
|
328
|
|
|
|
460
|
|
|
|
305
|
|
|
|
279
|
|
|
|
283
|
|
($/gallon)
|
|
|
1.64
|
|
|
|
1.13
|
|
|
|
1.55
|
|
|
|
0.81
|
|
|
|
0.86
|
|
|
|
1.34
|
|
|
|
0.99
|
|
|
|
1.38
|
|
|
|
0.92
|
|
|
|
0.84
|
|
|
|
0.85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE INFORMATION
($ per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
|
|
$
|
0.67
|
|
|
|
3.69
|
|
|
|
1.74
|
|
|
|
0.24
|
|
|
|
0.35
|
|
|
|
1.38
|
|
|
|
4.43
|
|
|
|
1.62
|
|
|
|
1.05
|
|
|
|
0.75
|
|
|
|
1.02
|
|
Diluted net income
|
|
$
|
0.67
|
|
|
|
3.68
|
|
|
|
1.72
|
|
|
|
0.24
|
|
|
|
0.35
|
|
|
|
1.37
|
|
|
|
4.41
|
|
|
|
1.61
|
|
|
|
1.05
|
|
|
|
0.75
|
|
|
|
1.02
|
|
|
|
|
1
|
|
Commission sales represent volumes marketed on a commission basis. Commission income
is included in revenue when earned.
|
|
2
|
|
Average realized price is calculated as revenue, net of commissions earned, divided by
the total sales volumes of produced and purchased methanol.
|
|
|
|
|
|
|
METHANEX CORPORATION 2008 FIRST QUARTER REPORT
QUARTERLY HISTORY
|
|
PAGE 27
|
Methanex (NASDAQ:MEOH)
Historical Stock Chart
From Jun 2024 to Jul 2024
Methanex (NASDAQ:MEOH)
Historical Stock Chart
From Jul 2023 to Jul 2024