Q3 2015 Trading Update

·       CF – OCI combination announced on 6 August 2015, US antitrust clearance received November 2015

·       Volumes sold were 1.6 million metric tons during the quarter, an 18.5% decrease compared to the same quarter of 2014, mainly due to unplanned shutdowns at Sorfert and lack of natural gas supply in Egypt

·       Methanol volumes increased 41.1% following debottlenecking at OCI Beaumont

·       Strong performance of European assets until a fire at the end of the quarter

·       EFC resumed full operations from end of October 2015, EBIC resumed at c. 60% rate from 4 November

·       Construction at Iowa Fertilizer Company 91.8% complete as at 30 September 2015 and plan to start production in Q1 2016

·       Construction at Natgasoline LLC 31.9% complete as at 30 September 2015

On 6 August 2015, OCI announced an agreement to combine its European, North American and global distribution businesses with CF Industries. Subsequent to the quarter, on 3 November 2015, OCI announced the expiration of the waiting period mandated for US government antitrust review of proposed transactions under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). Expiration of the waiting period under the HSR Act is an important milestone and satisfies one of the conditions necessary to close the proposed transaction. The proposed transaction, which is expected to close in the first half of 2016, remains subject to approval by the shareholders of CF and OCI, as well as certain other regulatory approvals and customary closing conditions. All necessary filings, including those necessary for European Commission antitrust approval, have been submitted.

During the third quarter of 2015, product volumes were lower than in the same quarter last year due to unplanned shutdowns of some of the plants at Sorfert in Algeria and very limited gas supply to our Egyptian plants. Sorfert resumed production at all lines in late October and is running at normal utilization rates. EFC resumed full operations from the end of October 2015 and EBIC resumed at c. 60% rate from 4 November.

Our European operations have benefited from continued overall tightness in the nitrate markets and low gas prices resulting in a very good quarter. OCI Beaumont reported improved results for the third quarter of 2015 compared to last year, as increased volumes and low natural gas prices offset lower selling prices. Overall, due to lower contributions from our Algerian and Egyptian operations, third quarter 2015 revenue and EBITDA were lower than the same period last year and the second quarter of 2015.

On the balance sheet side, a significant devaluation of the Algerian Dinar from the second to the third quarter of 2015 helped lower Sorfert’s net debt from c. $900 million as at 30 June 2015 to below $800 million as at 30 September 2015. We expect year-end net debt at Sorfert to be around $700 million, reflecting a $200 million reduction over a six-month period due to devaluation effects and operational cash flows. OCI N.V. net debt stood at c. $4.4 billion as at 30 September 2015. The increase from $4.1 billion as at 30 June 2015 is the result of capital expenditure for our greenfield projects in the United States, Iowa Fertilizer Company and Natgasoline.

OCI sold 1.6 million metric tons of nitrogen-based fertilizer and industrial chemical products in the third quarter of 2015. Total own product volumes sold reached 1.1 million metric tons during the third quarter of 2015, a 21.4% decrease over the third quarter of 2014 and a 21.1% decrease compared to the second quarter of 2015. Lower margin third party traded volumes dropped 12.0% to 0.5 million metric tons, resulting in an 18.5% decrease in total volumes sold during Q3 2015.

The decrease in volumes was primarily driven by lower urea and ammonia volumes from our operations in Algeria and Egypt:

·        Sorfert was intermittently shut down during the third quarter and part of the fourth quarter of 2015 for repairs of one of the ammonia production lines and the urea line. The plants restarted production in late October and are expected to run at normal levels for the remainder of this year.

·        Our Egyptian operations were mostly shut down during the quarter due to very limited natural gas availability. As a result, urea volumes from Egypt decreased during the third quarter of 2015 compared to the same quarter last year. Ammonia volumes were at very low levels during both the third quarter last year and the third quarter this year. However, natural gas supply to both Egyptian Fertilizers Company (EFC) and Egypt Basic Industries Corporation (EBIC) resumed at the end of October / beginning of November and both plants are operating with EFC at full utilization and EBIC at c. 60%.

Our operations in the United States and Europe performed well, benefiting from high utilization rates and low gas prices, thus offsetting lower selling prices:

·        Methanol volumes improved by 41.1% in the third quarter of 2015 compared to the same quarter last year, reflecting the higher design production capacity at OCI Beaumont following the finalization of its debottlenecking programme in April 2015. OCI Beaumont achieved utilization rates of 98% and 87% for methanol and ammonia respectively, which, combined with a drop of 32.7% in the average realized natural gas price from $4.28 / mmBtu in the third quarter of 2014 to $2.88 / mmBtu in the third quarter of 2015, helped offset lower selling prices for both methanol and ammonia.

·        Our recent acquisition BioMCN (June 2015), a methanol and bio-methanol producer based in The Netherlands, is not yet included in the reported methanol volumes, as the plant produces methanol for a fixed fee for a third party. These toll manufacturing agreements are in place until the end of 2015.

·        In Europe, our operations benefited from a low natural gas price of $ 6.8 / mmBtu during the third quarter of 2015 and a high nitrate premium. Calcium Ammonia Nitrate (CAN) volumes were up 6% from the second quarter of 2015, and were at the same level for the first nine months of 2015 compared to the same period in 2014.

·        On 30 September 2015, OCI Nitrogen was required to stop all production due to a fire in the basement of the CAN lines. On 8 October 2015, OCI Nitrogen restarted one ammonia production unit, shortly followed by Urea Ammonium Nitrate (UAN) and part of its melamine production. The CAN lines are expected to restart operations in the first quarter of 2016 once necessary repairs to essential infrastructure have been finalized.

Product Sales Volumes

In the third quarter of 2015, product prices were lower in US Dollar terms compared to 2014, resulting from increased supply, lower global demand and adverse exchange rate effects. Granular urea prices were down due to an increase in global exports and lower cash costs for marginal producers, where especially China incurred lower cash costs due to lower coal prices. Ammonia prices did not show their normal seasonal third quarter decline and were relatively stable from the second to the third quarter of 2015, but were down compared to 2014. Methanol prices have declined on the back of global supply, in addition to outages in downstream end markets. CAN Euro-denominated prices were stable, but decreased in US Dollar terms in the third quarter of 2015 compared to 2014.