METHANEX REDUCES PRODUCTION LEVELS IN TRINIDAD AND CHILE
March 16 2020 - 8:00AM
Methanex Corporation (TSX:MX) (NASDAQ:MEOH) announced today that it
has idled its Titan plant in Trinidad effective today and will idle
its Chile IV plant effective April 1, 2020. These changes are
being made for an indefinite period.
John Floren, President and CEO of Methanex,
commented, “We anticipate that methanol demand could be impacted in
the second quarter of 2020 as there has been a substantial
reduction in manufacturing activity in countries that have had
significant outbreaks of COVID-19. As a result, we are reducing
production at our methanol facilities, where we have flexibility in
our gas agreements, to prepare for lower demand for methanol. We do
not expect this production change to have a significant impact on
our cash flows in the current price environment.”
“Given the uncertainty in the global economy and
challenging commodity price environment, we are taking steps to
strengthen our balance sheet while maintaining financial
flexibility. We are evaluating all capital and operating
spending, including our advantaged Geismar 3 project.”
Methanex currently has significant liquidity of
approximately $700 million, including cash on hand and an undrawn
committed revolving credit facility, as well as an $800 million
undrawn construction facility for the Geismar 3 project.
Methanex is a Vancouver-based, publicly traded company and is
the world's largest producer and supplier of methanol to major
international markets. Methanex shares are listed for trading on
the Toronto Stock Exchange in Canada under the trading symbol "MX"
and on the NASDAQ Global Market in the United States under the
trading symbol "MEOH”. Methanex can be visited online at
www.methanex.com.
FORWARD-LOOKING INFORMATION WARNING
This news release contains forward-looking
statements with respect to us and our industry. These statements
relate to future events or our future performance. All statements
other than statements of historical fact are forward-looking
statements. Statements that include the words "will,"
"anticipates," “could,” “expect,” or other comparable terminology
and similar statements of a future or forward-looking nature
identify forward-looking statements.
More particularly and without limitation, any statements
regarding the following are forward-looking statements:
- expected demand for methanol and its derivatives;
- expected new methanol supply or restart of idled capacity and
timing for start-up of the same;
- expected shutdowns (either temporary or permanent) or restarts
of existing methanol supply (including our own facilities),
including, without limitation, the timing and length of planned
maintenance outages;
- expected methanol and energy prices;
- anticipated operating rates of our plants;
- expected operating costs, including natural gas feedstock costs
and logistics costs;
- availability of committed credit facilities and other
financing;
- our ability to meet covenants or obtain or continue to obtain
waivers associated with our long-term debt obligations, including,
without limitation, the Egypt limited recourse debt facilities that
have conditions associated with the payment of cash or other
distributions and the finalization of certain land title
registrations and related mortgages which require actions by
Egyptian governmental entities;
- commercial viability and timing of, or our ability to execute
future projects, plant restarts, capacity expansions, plant
relocations or other business initiatives or opportunities,
including our Geismar 3 Project;
- our financial strength and ability to meet future financial
commitments; and
- expected global or regional economic activity (including
industrial production levels).
We believe that we have a reasonable basis for making such
forward-looking statements. The forward-looking statements in this
document are based on our experience, our perception of trends,
current conditions and expected future developments as well as
other factors. 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, including,
without limitation, future expectations and assumptions concerning
the following:
- the supply of, demand for and price of methanol, methanol
derivatives, natural gas, coal, oil and oil derivatives;
- our ability to procure natural gas feedstock on commercially
acceptable terms;
- operating rates of our facilities;
- operating costs, including natural gas feedstock and logistics
costs, capital costs, tax rates, cash flows, foreign exchange rates
and interest rates;
- the availability of committed credit facilities and other
financing;
- timing of completion and cost of our Geismar 3 Project;
- global and regional economic activity (including industrial
production levels); and
- absence of a material negative impact from major natural
disasters.
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 primarily include those
attendant with producing and marketing methanol and successfully
carrying out major capital expenditure projects in various
jurisdictions, including, without limitation:
- conditions in the methanol and other industries including
fluctuations in the supply, demand and price for methanol and its
derivatives, including demand for methanol for energy uses;
- the price of natural gas, coal, oil and oil derivatives;
- our ability to obtain natural gas feedstock on commercially
acceptable terms to underpin current operations and future
production growth opportunities;
- the ability to carry out corporate initiatives and
strategies;
- actions of competitors, suppliers and financial
institutions;
- our ability to meet timeline and budget targets for our Geismar
3 Project, including cost pressures arising from labour costs;
- actions of governments and governmental authorities, including,
without limitation, implementation of policies or other measures
that could impact the supply of or demand for methanol or its
derivatives;
- import or export restrictions, anti-dumping measures, increases
in duties, taxes and government royalties and other actions by
governments that may adversely affect our operations or existing
contractual arrangements;
- world-wide economic conditions; and
- other risks described in our 2018 Annual Management’s
Discussion and Analysis and our Fourth Quarter 2019 Management’s
Discussion and Analysis.
Having in mind these and other factors, investors and other
readers are cautioned not to place undue reliance on
forward-looking statements. They are not a substitute for the
exercise of one’s own due diligence and judgment. The outcomes
implied by forward-looking statements may not occur and we do not
undertake to update forward-looking statements except as required
by applicable securities laws.
For further information, contact:
Kim CampbellManager, Investor RelationsMethanex Corporation604
661 2600 or Toll Free: 1 800 661 8851www.methanex.com
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