25 November 2019

OCI N.V. Reports Q3 2019 Results

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  • Revenues were $634 million and adjusted EBITDA $107 million in Q3 2019 compared to $774 million and $230 million in Q3 2018 respectively. This reflects an extensive planned turnaround and debottlenecking program at 11 of our nitrogen plants at four production sites, scheduled to coincide with the usual seasonal demand slowdown, as well as lower methanol and ammonia prices year-on-year. The results were also adversely impacted by an unplanned shutdown at Natgasoline from August to the beginning of November, which is covered by insurance.
  • OCI-produced volumes sold decreased 5% to 2.2 million metric tons during the third quarter of 2019 compared to the same period last year, reflecting the planned turnarounds and debottlenecking.
  • Adjusted net loss was $120 million in Q3 2019 versus a $15 million loss in Q3 2018, reflecting the lower EBITDA, accelerated depreciation at IFCo, non-cash FX losses and a pre-insurance loss at Natgasoline due to the shutdown.
  • Net debt was $4.06 billion as of 30 September 2019, at the same level as at 30 June 2019 despite $139 million capital expenditure during the quarter and the reduced volumes.
  • The completion and successful start-up of BioMCN’s second line during the third quarter marked the completion of our growth capex program. For the remainder of 2019 and 2020, we will benefit from a ramp-up in volumes, also reflecting the turnarounds and debottlenecking program in 2019.
  • On 30th September 2019, we achieved a major milestone with the completion of the landmark joint venture (Fertiglobe) with Abu Dhabi National Oil Company (ADNOC).
  • Subsequent to the quarter, OCI successfully completed a c.$1.4 billion equivalent refinancing in October through a dual-tranche bond offering in US$ and Euros. The refinancing has resulted in a reduction in the weighted average cost of debt of the refinanced debt of about 90bps and has extended our maturity profile.
  • Ahmed El-Hoshy has been appointed as Group Chief Operating Officer (COO), in which role he will oversee all commercial, operations and other business activities.

Statement from the Chief Executive Officer – Nassef Sawiris:

“We successfully completed an ambitious turnaround and debottlenecking program at almost all our nitrogen production sites this quarter. Post the turnarounds, we achieved material improvements in onstream performance and cost efficiency. For example, IFCo’s ammonia plant has beaten previous record utilization levels several times since the facility restarted in August and has been running at consistently high levels of up to ~116% of nameplate capacity on average during the past few months. Sorfert’s ammonia lines have also reached higher levels than before the turnarounds, with one line reaching its maximum design capacity, and the second line that restarted in August achieving levels above 93%. We anticipate a step-up in annual volumes at both those facilities in 2020.

On a like-for-like basis, outside the downtime for the turnarounds and debottlenecking, our nitrogen operations performed well during the third quarter, despite ammonia prices being lower than the same period last year and reaching trough levels.

Combined with our efficiency improvements, low natural gas feedstock costs in both Europe and the US have strengthened our position on the cost curve. European gas prices dropped considerably through the second and third quarter this year, reaching close to record low quarterly levels. We did not get the full advantage of the lower gas prices yet because of a three-month hedge which expired during the third quarter. We expect to benefit fully from the low gas price environment from the fourth quarter onwards.

Our methanol operations were negatively impacted by the unplanned shutdown at Natgasoline due to damage to a waste heat boiler. The incident is covered by insurance and Natgasoline received an initial payment of $30 million for business interruption and repairs, which will be reflected in the Q4 results.

Methanol prices in the third quarter this year were also lower than a year ago, reaching trough levels below the global industry cost curve. Prices moved off their lows reached during the summer but are still on average ~30% below the 10-year mid-cycle levels.

The lower production resulting from the turnarounds and debottlenecking programs together with lower methanol and ammonia prices were the primary drivers of a decrease in our quarterly EBITDA year-on-year. However, despite the lower EBITDA and concentrated capital expenditure during the quarter, our net debt remained flat, which highlights the underlying strength of our diversified business portfolio and strong free cash flow conversion.“


With the completion of our capital expenditure program and the concentration of turnarounds and debottlenecking projects at four of our nitrogen sites during the third quarter, together with the consolidation of the Fertiglobe joint venture, we expect to benefit from a significant increase in sales volumes in the fourth quarter and beyond. We expect to continue to benefit from low natural gas prices in both Europe and the United States, maintaining a position at the low end of the global cost curve.


  • Our global order book is currently robust based on recent tenders awarded to Fertiglobe to supply a combined total of almost 700kt urea to India and to the fast-growing Ethiopian market.
  • We expect higher sales volumes as a result of a significantly lighter program of planned turnarounds in 2020 than in 2019. We expect the biggest increases in volumes in 2020 to come from our lowest-cost plants, Sorfert in Algeria and IFCo in the US.
  • In addition to higher utilization rates and better cost efficiency, we expect IFCo to benefit from a positive outlook for Diesel Exhaust Fluid (DEF), one of our fastest-growing products. Following an expected doubling of volumes in 2019 compared to 2018, we expect further strong growth in 2020 for this product.
  • We have further strengthened our competitive position following the completion of the ADNOC Fertilizers joint venture, Fertiglobe, on 30 September. The consolidation of the JV has resulted in the addition of 2.1 million metric tons per annum capacity to our platform and is expected to generate substantial synergies.


Methanol prices have weakened in 2019 to trough levels due to a number of factors including falling crude oil prices, MTO affordability and exports from sanctioned countries to Asian markets being offered at heavily discounted prices. While spot prices have risen modestly, prices remain well below 10-year mid-cycle levels.

In 2020, we expect to benefit from the first full year of the new methanol capacities (Natgasoline, BioMCN’s second line and the OCI Beaumont debottlenecking finalized in July this year), as well as the normalization of production following the shutdowns in 2019. This should result in a significant increase in our methanol volumes in 2020. Together with our position at the low end of the global cost curve, we will continue to be well-placed.

Gas Markets

We expect to continue to benefit from low natural gas prices in both Europe and the United States.

In 2019, European gas prices have been substantially below those seen in recent years. We believe there has been a structural shift in the European gas markets this year and expect prices to remain within a core bandwidth of $3 – 5 per MMBtu, barring any surprise weather shocks, as a result of increased Atlantic basin LNG exports; competing with Russian imports into Europe.

In the US, Henry Hub benchmark prices have been significantly below the levels of last year at globally competitive prices. The forward curve suggests this will remain for the foreseeable future, which will continue to keep our US operations on the left-hand side of the global cost curve.


Conference call details

A conference call for investors and analysts will be hosted on Monday 25th November 2019 at 4:00 PM CET (3:00 PM GMT, 10:00 AM ET) by Nassef Sawiris, Chief Executive Officer, and Hassan Badrawi, Chief Financial Officer.

Investors can access the call by dialing:

Standard International:                +44 (0) 20 3009 5710
United Kingdom FreeCall:           0800 376 7425
Netherlands LocalCall:                +31 (0) 20 715 7366
United States FreeCall:               1 (866) 869 2321

Conference ID:                           8269319

A conference call replay will be available until 25th December 2019. The replay access numbers are:

Standard International:                +44 (0) 333 300 9785
Netherlands:                                 +31 (0) 20 713 2967
United States:                              1 (866) 331-1332

Conference ID:                           8269319


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