14 May 2024

OCI Global Reports Q1 2024 Results

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Financial Highlights

  • OCI Global (Euronext: OCI) reported total Q1 2024 revenues of $1,224 million, a decrease of 11% YoY, and total Q1 2024 adjusted EBITDA of $297 million, a decrease of 12% YoY. The declines against the comparative period were primarily driven by lower nitrogen pricing globally following high product pricing in early 2023. The impact of lower pricing was partially offset by improved operational performance in Q1 2024 compared to Q1 2023.
  • Total adjusted EBITDA in the quarter includes $47 million in realized losses from natural gas hedges.
  • Adjusted net profit from total operations in Q1 2024 was $36 million, versus adjusted net loss of $15 million in Q1 2023.
  • Total operating free cash flow was $73 million in Q1 2024. Net debt from total operations was $3,795 million on 31 March 2024, with a total net leverage on trailing 12-month adjusted EBITDA of 3.2x on a consolidated basis.
  • Q1 2024 adjusted EBITDA from continuing operations of $24 million compares to a $54 million loss in Q1 2023. Continuing operations benefited from a marked improvement in own-produced sales volumes across the European Nitrogen and Methanol segments, reduced realized hedge losses and improved margin given lower gas prices compared to last year.

Business Highlights

  • In March 2024, OCI commenced production of AdBlue® (or diesel exhaust fluid, “DEF”) in Europe, a solution used in diesel engines to reduce harmful emissions. OCI Nitrogen’s current 300,000 tonnes per annum AdBlue® capacity has meaningful potential for expansion and will serve a growing European market for diesel exhaust fluid driven by regulation. The introduction of AdBlue® further leverages OCI’s existing nitrogen platform towards increased diversification and higher value products.
  • Results in the first quarter reflect positive momentum in OCI’s manufacturing excellence program with achieved efficiency gains reflecting continued investment in OCI’s productive assets; this remains a key area of management focus.

Strategic Review

  • In December 2023, OCI announced the divestments of its 50% equity holding in Fertiglobe Plc (“Fertiglobe”) and 100% of its equity interests in Iowa Fertilizer Company LLC (“IFCo”) to Abu Dhabi National Oil Company P.J.S.C. (“ADNOC”) and to Koch Ag & Energy Solutions (“KAES”) respectively. This followed a multi-faceted global strategic review, with the objective of closing OCI’s HoldCo discount and crystallizing value for shareholders. Both transactions are expected to close during 2024, subject to legal and regulatory conditions and relevant anti-trust approvals.
  • As previously guided, OCI intends to use the $6.2 billion of net cash proceeds to significantly deleverage the company, and to fully fund the remaining capital expenditure required to complete Texas Blue Clean Ammonia. OCI also plans to deliver a substantial extraordinary return of capital to shareholders of at least $3 billion with the close of both transactions.
  • OCI held an extraordinary shareholders meeting (“EGM”) on 25 April 2024 and received unanimous shareholder approval for: (i) the divestment of OCI’s entire equity stake in the share capital of Fertiglobe to ADNOC; and (ii) the payment of an extraordinary interim cash distribution of EUR 4.50 per share (equivalent to ~$1 billion) subject to the completion of the divestment of Fertiglobe, through a repayment of capital or, at the election of the shareholder, as a cash dividend. A further extraordinary cash distribution is expected during 2024, subject to the completion of the divestment of IFCo. As a result of these strategic events and the upcoming extraordinary distributions of cash to shareholders, OCI has suspended the payment of regular dividends during the transition period. For context, OCI has distributed over $2 billion in cash since commencing its dividend distributions in FY 2021.
  • Following significant inbound interest in the continuing business, OCI continues to assess various options and opportunities to maximize value for all stakeholders. OCI expects to update the market on its strategic review at the time of the Q2 2024 results announcement.

Ahmed El-Hoshy, CEO of OCI Global commented:

“We are pleased with OCI’s resilient performance in the first quarter of 2024 and the continued progress towards efficiency gains alongside execution of our global decarbonization strategy. Further to the announced divestitures in December 2023 of our equity stakes in Fertiglobe and IFCo, we remain focused on successfully running our continuing business and growing our leadership position in low-carbon offerings across our key markets.

Following extremely challenging market conditions in 2023 conflated with prolonged turnarounds at some of OCI’s assets, OCI benefited in the first quarter of 2024 from improved asset reliability. Efficiency improvements helped offset disruption from unplanned outages in our methanol business in January on account of freezing weather conditions, and more cautious purchasing activity in north-western Europe due to inclement weather later in the quarter. Notwithstanding these issues, OCI’s manufacturing excellence program and investments to improve reliability continue to drive efficiency gains, with asset utilization rates approaching – and in some cases – surpassing historical levels across both the nitrogen and methanol complex by the end of the quarter. The improvement is further evident in the 25% year-on-year increase in own-produced sales from total operations during the quarter, or an 80% year-on-year improvement on a continuing basis.

On a continuing basis, our differentiated and well capitalized platform is optimally positioned to accelerate efforts in the energy transition space. In the US, this portfolio includes OCI’s Texas Blue Clean Ammonia facility, which remains on track for production in H1 2025, alongside our first-quartile methanol complex also located in Beaumont Texas. In Europe, this portfolio includes our leading integrated nitrates platform strategically located in Europe’s nitrogen heartland and our proprietary import and distribution capacity at the Port of Rotterdam. With recent expansions into AdBlue® and the CAN+S markets, we have enriched and diversified our European capacity set through increased exposure to attractive non-agricultural, non-cyclical and premium fertilizer markets and we remain on track to increase the volume of lower carbon products that we supply to our distribution customers in Europe, where we continue to replace conventional products with more sustainable ones.

In closing, I wish to extend my thanks to the entire OCI team for their relentless focus on process safety and operational excellence, which remains our top priority, and my colleagues’ ongoing commitment to manufacturing excellence.”

Continuing Operations Financial, Operational and Strategic Highlights

Further to the announcement of the expected divestitures of OCI’s equity holdings in Fertiglobe, IFCo and a portion of N-7, these segments are now classified as discontinued operations. Reported FY 2024 and comparative FY 2023 financial results reflect the performance of continuing businesses and discontinued businesses separately. The continuing operations include the group’s holding costs, net finance costs and other costs on an unadjusted basis.


  • In the first quarter, total own produced sales volumes from OCI’s methanol assets increased 59% YoY to 352 thousand tonnes. Production for the quarter was negatively impacted due to winter freeze related shutdowns in January 2024, albeit not to the same extent as in Q1 2023, when a similar freeze caused significant disruption to operations. As part of OCI’s manufacturing excellence program, OCI is weatherizing its plants for greater future resilience and expects any future impact to be substantially mitigated. Notwithstanding the winter related disruption, both OCI Beaumont’s ammonia and methanol lines were fully operational in the latter half of the quarter, achieving 94%+ asset utilization rates in March.
  • The methanol business generated an adjusted EBITDA of $30 million in Q1 2024, compared to $24 million in Q1 2023. Excluding realized gas hedge losses adjusted EBITDA was $55 million in Q1 2024, compared to $62 million in Q1 2023. Of note, Q1 2023 EBITDA benefited from a one-off $33 million realized gain from the sale of unused European allowances (EUA’s) on account of the shutdown of OCI’s European facility, BioMCN, which did not repeat in Q1 2024. Excluding this, the underlying improvement YoY reflects stronger operational performance partially offset by lower ammonia prices.
  • The Methanol business includes the production and sale of conventional methanol, biomethanol, ammonia (produced at OCI Beaumont) as well as results from trading activities.

European Nitrogen

  • European Nitrogen reported Q1 2024 revenues of $257 million, compared to $281 million in Q1 2023. The segment reported adjusted EBITDA of $17 million compared to a loss of $60 million in Q1 2023. Lower nitrogen prices were partially offset by higher volumes YoY with the prior year comparative negatively impacted by a turnaround at one of the plant’s ammonia lines. Adjusted EBITDA in Q1 2024 further benefited from lower gas prices as well as lower realized gas hedge losses. Excluding realized gas hedge losses, adjusted EBITDA was $22 million in Q1 2024, compared to a $43 million loss in Q1 2023. Realized gas hedge losses were $5m in Q1 2024 compared to $17 million in Q1 2023.
  • OCI commenced production of AdBlue® in March 2024, a solution used in diesel engines to reduce harmful emissions of nitrogen oxides and particulates, in Geleen, Netherlands. OCI’s facility has the capacity to produce up to 300,000 tonnes a year of AdBlue®, with capability to expand production in line with market demand. OCI’s AdBlue® production will serve the growing north-western European automotive market, where the reduction of harmful emissions is an increasing regulatory focus and key driver of demand. The introduction of the ‘Euro 6 Standard’, which limits emissions to 80mg/km of NOX gases for diesel vehicles is expected to boost the AdBlue® market by 8% by 2028.
  • In April, OCI announced the long-term supply of 60% guaranteed lower carbon footprint ammonia to produce COMPO EXPERT’s (“COMPO”) lower carbon NPK fertilizers. COMPO will initially replace 25% of its ammonia consumption with OCI’s lower carbon product in 2024 and has plans to further increase the ratio of OCI supplied lower carbon ammonia over the next two years. The ammonia will be supplied from OCI’s facilities in Texas via OCI’s proprietary import terminal in Rotterdam.

Texas Blue Clean Ammonia

  • OCI’s 1.1 million tonne Texas Blue Clean Ammonia project will be the world’s first large-scale greenfield blue ammonia production facility. Construction is well underway with $561 million spent as of 31 March 2024. All major contracts with key project partners have been signed, engineering is largely complete and all long lead equipment procured, affording OCI significant visibility over project completion. First ammonia production is expected in H1 2025, at least two years ahead of other announced greenfield large-scale low-carbon projects.
  • Texas Blue benefits from early mover advantages including superior construction terms – pre-emptively secured ahead of a tightening construction market – the economic benefits of US IRA incentives, and the reliability and quality assurance provided by best-in-class partnerships, proven technology, and feedstock redundancy. An early start has insulated OCI from escalating costs in the industry, which has led to the cancellation or postponement of several other announced projects.
  • Texas Blue Clean Ammonia is well positioned for the advent of Europe’s Carbon Border Adjustment Mechanism (CBAM) in 2026. The blue ammonia at OCI’s facility when produced with renewable electricity, offers a CO2 footprint almost identical to that of green ammonia on a scope one and two basis – the level of measurement for CBAM. As a result, the economic benefit of blue and green to the European market based on CBAM is equal.
  • OCI’s Texas Blue design incorporates space for a second identical line in the original plot, with utilities and supporting infrastructure oversized to facilitate a future expansion. This creates optionality to capitalize upon accelerating demand for low-carbon ammonia, expected to reach 24 million tonnes by 2030 and ~45 million tonnes by 2035, driven by regulatory changes, decarbonization of existing demand and growth in new applications. The reduced project scope for a second line implies a faster schedule, minimal interruptions to the first, and lower costs compared to similar new build greenfield projects today. Permitting is already underway for a second line.

Market Outlook


  • US Methanol prices increased through the quarter to reach similar average levels to Q1 2023, reflecting supply disruption from turnarounds and shutdowns at competitor facilities. US benchmark contract prices rose 7% from January to settle at $634/t in April, whilst US Gulf Coast spot prices increased by 10% through the quarter. Although prices have softened into Q2 as Q1 supply disruptions have largely reversed, we continue to see multiple positive drivers supporting methanol markets in the medium-to-longer term:
    • Methanol-to-olefin (MTO) production costs today are ~10% below naphtha-based olefins production, incentivizing strong operating rates and reaching levels above the last 3-year average of ~73%; this is further supporting methanol demand.
    • The start-up of new acetic acid and methyl methacrylate units in the US in 2024 is expected to increase methanol demand by almost one million tonnes in one of OCI’s major sales markets.
    • Methanol demand is also seeing uplift from higher oil prices, supporting methanol affordability into MTO and energy applications such as gasoline blending. Methanol is a key beneficiary from a rebound in industrial activity.
    • Between 2025-28, industry consultants expect incremental methanol demand growth of thirteen million tonnes, excluding demand from marine fuels. This compares to five million tonnes of incremental supply growth. Total methanol demand including the expected demand from marine fuels is expected to grow by twenty-one million tonnes, or four times the growth in supply, over the period.
    • OCI remains confident on the decarbonization-led drivers of demand for methanol, notably the maritime industry, with increasing regulation placing greater pressure to reduce carbon emissions. In January 2024, the EU extended coverage of its emissions trading scheme (ETS) to include the maritime sector. From 2025, the FuelEU maritime initiative will mandate a reduction in the greenhouse gas intensity of marine fuels, which will support the uptake of lower carbon fuel sources such as methanol and eventually ammonia.
  • The recently adopted more ambitious Fit-for-55 framework targets including RED III for road, FuelEU Maritime for marine, RefuelEU Aviation for aviation and RepowerEU for bio-methane, are mandating greater carbon emission reductions across both existing and new sectors:
    • The maritime sector is becoming increasingly incentivized to adopt clean fuels, partly driven by FuelEU Maritime regulation from 2025. Today, there are over 270 methanol dual fuel newbuild/retrofit ships on order, compared to ~250 ships at the time of OCI’s Q4 2023 results. In total, this represents over 7.5 million tonnes per annum of potential additional methanol demand, compared to current maritime demand of 350 thousand tonnes and a current total global merchant market of ninety-one million tonnes.
    • In Europe, the Renewable Energy Directive is stipulating stricter requirements for the use of advanced biofuels in road-use, which we expect to drive both demand and premium for biofuels upwards, more so as established sources (i.e., road) begin to compete with demand from newer customers. Based on industry projections, total fuel-based demand for green methanol from road, marine and aviation could reach up to nine million tonnes compared to less than 200,000 tonnes today.



  • A combination of improving demand from the US spring application season, several plant and maintenance outages across the US, Middle East and Indonesia, and delays in new supply commissioning, helped stabilize ammonia prices in the latter half of the first quarter. This partially offset price softness earlier in the period due to reduced European gas costs and the return of ammonia supply following widespread disruption in Q4 2023.
  • In the near-term, merchant supply is expected to increase with the arrival of new capacity in the US Gulf and an increase in Russian exports from a new Black Sea terminal. Notwithstanding these additions, some key ammonia markets have been showing signs of improved import demand in early-2024. This strengthening demand is expected to support a broader global trade recovery in ammonia following two years of prolonged contraction.
  • In the medium to longer term, we see accelerating incremental demand from new applications for low-carbon ammonia such as a fuel for power generation, as a maritime bunker fuel and as a clean hydrogen carrier. Consultants forecast incremental demand from these new applications to reach 24 million tonnes per annum by 2030, more than double the quantity traded today.
  • Phase 2 of Europe’s Carbon Border Adjustment Mechanism (CBAM) expected in 2026 is catalyzing growing interest in decarbonization opportunities within the existing fertilizers and chemicals value chain. Europe’s position as global marginal producer suggests that European carbon costs could support an increase in global ammonia/fertilizer prices, and hence boost demand for low-carbon ammonia and fertilizers. In addition to being able to capture this carbon premium through our Texas Blue Clean Ammonia production, OCI Nitrogen also stands to be a key beneficiary given its high natural gas efficiency (the natural gas efficiency at OCI Nitrogen is 32MMBtu/tAmmonia compared to an EU average of 37MMBtu/tAmmonia) and low CO2 emissions during ammonia production.


  • In urea markets, warm weather in the US coupled with low inventory levels has led to strong domestic demand and a material increase in US planted crop area during the quarter. In contrast, unusually wet weather in north-western Europe through autumn and spring has hindered application desire, weighing on price momentum during the quarter.
  • Urea is expected to be well supplied over the coming months following the lower-than-expected demand early in the year across some geographies. Notwithstanding this, we see resilience in several demand indicators, including an expected rebound of corn futures in H2 2024 and 2025, as well as an improving urea/corn barter ratio in Brazil, and strong urea demand in the APAC markets.
  • Longer-term demand growth of thirteen million tonnes is still expected to materially outstrip additional capacity growth of eight million tonnes by 2028.

Nitrates and other Premium Products

  • Wet weather in north-western Europe and falling urea prices delayed application and demand appetite for nitrates in the first quarter. We anticipate a strengthening in demand as we move into Q2 with completion of some of the delayed purchase activity from Q1.
  • With a normalization of European fertilizer markets, the nitrates markets are also benefiting from a widening premium over urea. The outlook for nitrates over the medium to longer term is further supported by decarbonization trends, which favor the use of nitrates compared to urea given their high nitrogen use efficiency and option to produce without CO2.

Conference call details

A conference call for investors and analysts will be hosted on Tuesday, 14 May 2024 at 3:00 PM CET (2:00 PM BST, 9:00 AM ET) by Ahmed El-Hoshy, Chief Executive Officer and Hassan Badrawi, Chief Financial Officer. 

Investors can access the call and ask live questions by dialing one of the following numbers using the code 763690

UK Toll-Free Dial-in: +44 800 358 1035

USA Toll-Free Dial-in: +1 855 979 6654

Netherlands Dial-in: +31 85 888 7233

UAE Dial-in: +971 800 035704553

All other locations: Global Dial-In Numbers

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 OCI Global corporate website at www.oci-global.com

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