OCI Global Reports H2 2024 Results

Hassan Badrawi, CEO of OCI Global commented:

“2024 has been a year of pivotal transformation for OCI Global. We have successfully executed a series of strategic transactions, significantly strengthened our balance sheet, and delivered exceptional returns to our shareholders. These milestones reflect our agility in navigating evolving market conditions while reinforcing our deep value creation ethos.

Specifically, in the second half of 2024, we announced the divestment of OCI Methanol to Methanex and completed the divestments of our entire Fertiglobe equity stake to ADNOC, Iowa Fertilizer Company to Koch Industries, and OCI Clean Ammonia[1] to Woodside Energy. These transactions will collectively amount to over $11.6 billion in gross proceeds, which has allowed us to repay approximately $1.8 billion in debt and return $3.3 billion in cash distributions to shareholders in Q4 2024. An additional cash distribution of up to $1 billion ($4.75 per share) is further planned for Q2 2025, subject to the necessary approvals. This would take OCI’s cash returns to shareholders to $6.4 billion over the course of a four-year period and bring total returns to shareholders via buybacks, share and cash distributions to more than $21 billion since our original listing in 1999.

Looking ahead to 2025, our priority remains executing key outstanding deliverables including finalizing the OCI Methanol transaction, achieving Project Completion for OCI Clean Ammonia, and leveraging the operational excellence and strategic value of our European Nitrogen assets against a supportive European market backdrop. Latterly, our nitrogen production facility in Geleen, independent ammonia import terminal in Rotterdam and leading pan-European distribution platform are positioned favorably with respect to recent rationalization in the industry and increasing ammonia throughput into Europe; OCI is set to benefit further in the medium- to longer-term based on growing regulatory support and our expectation of normalized gas pricing.

Beyond this, with a leaner, more agile and streamlined organization, OCI Global is well placed to navigate its future supported by financial strength and strategic optionality.” 

Financial Highlights

FY 2024 Key Highlights

• OCI Global (Euronext: OCI) reported FY 2024 Total Operations (Continuing and Discontinued Operations) revenue of $4,084 million compared to $5,022 million in FY 2023, and FY 2024 Total Operations adjusted EBITDA of $826 million compared to $1,214 million in FY 2023.

• OCI reported FY 2024 Continuing Operations (European Nitrogen and Corporate Entities segments)revenue of $975 million, an increase of 3% YoY and an FY 2024 adjusted EBITDA loss of $32 million compared to a loss of $126 million in the prior year.

• FY 2024 adjusted EBITDA for European Nitrogen (OCI’s sole operating segment within Continuing Operations today) was $55 million compared to an adjusted EBITDA loss of $51 million in FY 2023. Earnings benefited from an improvement in volumes and lower average natural gas prices in 2024 compared to 2023 despite an increase in gas pricing in H2 2024.

H2 2024 Key Highlights

• OCI reported H2 2024 Total Operations revenue of $1,648 million, a decrease of 28% compared to the same period last year and H2 2024 Total Operations adjusted EBITDA of $234 million compared to $552 million in H2 2023, largely reflecting the deconsolidation of IFCo and Fertiglobe in the period.

• OCI reported H2 2024 Continuing Operations revenue of $466 million, a 13% increase YoY while Continuing Operations adjusted EBITDA saw a $39 million loss in H2 2024 compared to a $14 million loss in H2 2023. Given recent divestments, OCI’s corporate cost base does not yet fully reflect the reduced scope and scale of the Continuing Operations. As such, underlying corporate costs reported within Corporate Entities more than offset earnings from European Nitrogen in the period.

• H2 2024 revenue for European Nitrogen was $466 million while adjusted EBITDA was $7 million; this compares to $415 million and $20 million in H2 2023, respectively. Notwithstanding a +40% YoY increase in own-produced sales, European Nitrogen adjusted EBITDA deteriorated YoY as a result of lower nitrate pricing, higher and more volatile gas prices, other cost inflation and a reduced benefit from natural gas hedge gains.

• H2 2024 underlying corporate costs excluding one-offs within Corporate Entities were $46 million compared to $34 million in H2 2023. The YoY increase primarily reflects the cessation of corporate recharges for divested businesses, combined with a lag in achieved cost savings relative to the timing of transaction closings in 2024. Corporate costs also include certain stranded and restructuring costs not considered as one-offs. OCI continues to make substantial progress in right-sizing its corporate cost base to better serve the continuing structure and scale of the business, with corporate headcount 70% lower today compared to its peak in 2023. OCI expects to beat its previously guided target of $30 – $40 million of corporate costs on a run-rate basis by the end of 2025.

• Reported net profit attributable to shareholders from Total Operations was $4,969 million in H2 2024 compared to a reported net loss of $230 million in H2 2023, reflecting a $4,938 million gain from the sale of subsidiaries related to the sale of IFCo, Fertiglobe and OCI Clean Ammonia in H2 2024. Reported net profit attributable to shareholders from Continuing Operations was $4 million in H2 2024 compared to a reported net loss of $104 million in H2 2023.

• The adjusted net loss attributable to shareholders from Total Operations was $53 million in H2 2024 compared to an adjusted net loss of $141 million in H2 2023. For Continuing Operations, the adjusted net loss attributable to shareholders was $63 million in H2 2024 compared to an adjusted net loss of $95 million in H2 2023.

Free Cash Flow and Net Debt Highlights

• Operating free cash outflow from Continuing Operations in H2 2024 was $250 million compared to a $449 million outflow in H2 2023. The H2 2024 cash outflow reflects exceptional costs related to the strategic review and cost optimization initiatives, as well as seasonal working capital movements in OCI’s European Nitrogen business. The seasonal working capital impact has been more acute this year due to the conflation of delayed purchasing activity by farmers with higher input prices for producers on account of rapidly increasing gas prices in H2 2024. Longer-term, OCI expects to benefit from materially lower gas prices as TTF reverts to historical norms, as well as improved fertilizer pricing supported by the proposed introduction of CBAM in 2026 and the implementation of progressive Russian and Belarusian import tariffs from 1 July 2025.

• Operating free cash outflow also includes maintenance capital expenditures, as well as tax, cash interest and lease payments.

• Capital expenditure including maintenance and growth capex for Continuing Operations was $29 million in H2 2024 compared to $80 million in H2 2023.

• Total project spend for OCI Clean Ammonia in H2 2024 amounted to $294 million of which $155 million was spent after the transaction closed on 30 September 2024. Total project spend as of 31 December 2024 was $954 million compared to a total project budget of $1.55 billion, including contingencies. From an accounting perspective, OCI Clean Ammonia expenditures following the 30 September 2024 close date are recorded as payments against a liability. Previously, spend has been categorized either as growth capital expenditure in Discontinued Operations or as pre-operating costs within the EBITDA of Discontinued Operations.

• Net cash from Continuing Operations was $1,371 million as of 31 December 2024 compared to a net debt position of $2,194 million as of 30 June 2024, and a net debt position of $2,001 million on 31 December 2023. The end-Q4 net cash position follows the closing of the Fertiglobe transaction in October 2024 and payment of the previously announced €14.50 extraordinary distribution in November 2024. The reported net debt/cash position for Continuing Operations for this period as well as the comparative period represents a deconsolidation of the balance sheet of Discontinued Operations.

Key Strategic and Business Highlights

2024 has been a defining year for OCI, as the company executed several transformative strategic initiatives to unlock shareholder value and position itself for the future. Notable milestones in H2 included:

• Effective 15 October 2024, Mr. Hassan Badrawi was appointed Chief Executive Officer (CEO) of OCI and Mr. Beshoy Guirguis assumed the role of Chief Financial Officer (CFO) of OCI. Concurrently, Mr. Ahmed El-Hoshy stepped down as CEO of OCI to continue in his full-time role as CEO of Fertiglobe.
• On 8 September 2024, OCI entered into a binding equity purchase agreement for the sale of 100% of the equity interests in its global methanol business (“OCI Methanol”) to Methanex Corporation (“Methanex”) for a purchase price consideration of $2.05 billion on a cash-free debt-free basis. The transaction is expected to close in Q2 2025 and positions OCI favorably with regards to ongoing exposure to the methanol industry, with future upside optionality.
  • Pursuant to the sale announcement, OCI announced the accelerated repurchase of its 11% and 4% minority stakes in OCI Methanol from Alpha Dhabi Holding PJSC and ADQ respectively for a total consideration of $335 million, including the release of final dividends due.
  • Concerning the dispute over certain shareholder rights between OCI and its joint venture partner Proman with respect to the Natgasoline asset, after the Delaware Court of Chancery’s ruling in OCI’s favor on 29 January 2025, Proman filed a notice of appeal to the Delaware Supreme Court on 28 February 2025. Proman subsequently irrevocably withdrew its appeal and, as a result, the Court of Chancery’s ruling in OCI’s favor is now final. Following this successful resolution, OCI’s indirect interest in the Natgasoline joint venture will be included as part of Methanex’s acquisition of OCI Methanol. The transaction has been approved by the boards of directors of both OCI and Methanex and remains subject to receipt of certain regulatory approvals and other closing conditions.
• On 5 August 2024, OCI entered into a binding equity purchase agreement for the sale of 100% of its equity interest in its Clean Ammonia project currently under construction in Beaumont, Texas (“OCI Clean Ammonia”, “Beaumont New Ammonia” or the “Project”) to Woodside Energy Group Ltd (“Woodside”) for a purchase price consideration of $2.35 billion on a cash-free debt-free basis and following a competitive process. On 30 September 2024, OCI announced the successful closing of the transaction with the receipt of 80% of the cash proceeds – or approximately $1,880 million and an additional $20 million adjustment for certain pre-paid expenses – and a deferred consideration of 20% – or approximately $470 million – to be received at Project Completion[2] expected in H2 2025. Subsequent to the closing date, final proceeds were adjusted for an additional $2 million of cash proceeds based upon actual net indebtedness and actual transaction expenses. OCI continues to be involved with the construction, commissioning, and start-up of the facility through Project Completion, with a financial obligation to pay for the remaining capital expenditure and costs to Project Completion. Construction is well advanced today with $954 million cash spent as of 31 December 2024 (including both historical capital expenditure and certain pre-operating expenses). OCI expects a total investment cost through Project Completion of approximately $1.55 billion, including contingencies.
• On 29 August 2024, OCI announced the successful completion of the sale of 100% of its equity interests in Iowa Fertilizer Company LLC (“IFCo”) to Koch Ag & Energy Solutions (“KAES”) following a competitive process. The transaction also included the sale and transfer of specified contracts of N-7, the trading entity selling the product of IFCo, to KAES. The total consideration received was $3.6 billion in cash, which included an estimated net debt and working capital settlement. Net proceeds received by OCI amounted to approximately $2.6 billion, after adjusting for bond defeasance, mark to market on outstanding hedges, and other transaction related costs.
• On 15 October 2024, OCI announced the successful completion of the divestiture of 50% of the equity interests of Fertiglobe to Abu Dhabi National Oil Company P.J.S.C. (“ADNOC”), whereby OCI fully exited and monetized its entire equity stake. In line with the definitive agreement signed in December 2023 and as a result of completion, OCI received a net cash consideration of $3,185 million and a $362 million contingent consideration held in escrow upon closing of the deal, post-closing adjustments of $70 million. Collection of the contingent consideration is dependent on the materialization of certain indemnifications agreed as part of the transaction. Management’s estimate is that the amount held in escrow will cover such indemnifications[3].

The expected cumulative crystallization of approximately $11.6 billion of gross proceeds from these four transactions has afforded OCI significant flexibility to deliver on its capital allocation priorities, including deleveraging at a gross level, as well as returning a meaningful quantum of capital to shareholders.

• All OCI NV bank debt has now been repaid, including the revolving credit facility and bridge facility utilized during the transition period. The $698 million 2025 Senior Secured Notes were redeemed at par on 15 October 2024. Total debt repayment in H2 2024 amounted to $1,817 million. Remaining cash proceeds have been invested whilst OCI currently retains principal gross debt of $685 million, $600 million of which is in the form of its 2033 bonds. OCI’s capital structure will be reviewed on the closing of the OCI Methanol transaction.
• Following the successful completion of the Fertiglobe and IFCo transactions, OCI paid an extraordinary distribution of €14.50 per share in aggregate (~$3.3 billion) to shareholders on 14 November 2024 via a capital repayment.
• OCI expects to make a further extraordinary distribution of up to $1 billion through another repayment of capital during Q2 2025, subject to the necessary approvals.

[1] The OCI Clean Ammonia project has been renamed to Beaumont New Ammonia by Woodside to reflect change of ownership.

[2] Production of lower carbon ammonia is conditional on supply of carbon abated hydrogen and ExxonMobil’s CCS facility becoming operational.

[3] The contingent consideration and the indemnifications are offset in the financial statements pursuant to IAS 32.

Conference call details

A conference call for investors and analysts will be hosted on Friday, 14 March 2025 at 3:00 PM CET (2:00 PM GMT, 10:00 AM ET) by Hassan Badrawi, Chief Executive Officer and Beshoy Guirguis, Chief Financial Officer. 

• Investors and analysts can access the call and ask live questions by pre-registering here. Upon registration, an individual access code and dial-in details will be automatically sent via email.
• Participants may also join via the webcast. Please pre-register and join here. 

Please log-in or dial-in at least 10 minutes prior to the start time to ensure a fast connection to the call. 

A replay of the webcast will be available through the webcast link above.