5 May 2021

Q1 2021 Results

Download PDF


Financial and Outlook

  • Revenues increased 38% to $1,120 million and adjusted EBITDA increased 134% to a record $452 million in Q1 2021 as compared to Q1 2020
  • Adjusted net profit of $94 million in Q1 2021 compared to adjusted net loss of $82 million in Q1 2020
  • Net debt of $3.4 billion as of 31 March 2021, down $306 million from 31 December 2020
  • Trailing net debt / adjusted EBITDA of 3.0x as of 31 March 2021, achieving our year-end net leverage target early
  • Based on current visibility on volumes and pricing, we expect a stronger second quarter with higher adjusted EBITDA than in Q1, and expect further deleveraging during Q2

Business Updates

  • Following board approvals, Fertiglobe, a 58%/42% OCI and Abu Dhabi National Oil Company (ADNOC) partnership, has started preparations for a potential IPO in Abu Dhabi, subject to market conditions
  • OCI has taken steps to further decarbonize its portfolio with the ability to produce up to 365 ktpa blue ammonia at OCI Beaumont in Texas starting H2 2021
  • OCI has established a new Clean Fuels business unit, adding low carbon products including ammonia to its current and fast-growing biofuels offering
  • As ammonia and methanol will play a key role to decarbonize many sectors in the hydrogen economy and outright as clean fuels, OCI has taken the decision that any potential strategic action for the methanol business will be in the form of a partnership rather than a full divestment


Statement from the Chief Executive Officer – Ahmed El-Hoshy:

Free cash flow accelerating, targets met

“We are pleased that we have reported a record quarter and have already achieved our year-end net leverage target at the end of Q1. We have benefited from our diverse stream of global revenues and our competitive position on the global cost curve, with around half of our total global gas requirement at fixed gas prices. This has benefited Fertiglobe in particular, which has more than doubled its EBITDA year-on-year.

The outlook for OCI remains positive for Q2 and beyond, supported by strong underlying demand for nitrogen fertilizers driven by healthy farm economics, and a continued recovery in our industrial markets for ammonia, methanol, melamine and DEF. We are seeing very strong demand for a wide range of downstream products used across various end markets including construction, automotive and textiles. Furthermore, the recovery in transportation applications increasingly bolsters demand for our products, keeping market conditions tight.

The recovery in global nitrogen prices is underpinned by healthy fundamentals

I would like to thank the global team for delivering this record-breaking quarter, as we emerge from a low 2020 with strong focus on operational excellence and as we stick to our commercial strategy, maintaining a disciplined sales approach. Selling prices at the end of last year and at the start of the first quarter were still at seasonally low levels, which is typically the case in the first and third quarters of the year. We did not sell forward material amounts of our products at that time.

Despite downtime and lost volumes during extreme cold weather conditions in Q1, we were able to increase our sales in March and April, which bodes well for Q2 results. This allows for strong visibility on our US Midwest operations which are benefiting from a combination of higher prices and sales volumes in the second quarter. In Europe, we also expect significantly better performance in Q2 compared to Q1, when we had some downtime at our plants, and as we benefit from higher ammonia and melamine prices in particular. For Fertiglobe, robust import demand in Latin America, Australia, and India is driving healthy urea volumes in Q2.

Looking to the remainder of 2021, nitrogen fundamentals are healthy, and we expect to remain in a demand-driven environment. Strong agricultural demand continues to drive corn prices to higher levels, supporting farm economics and nitrogen demand and prices.

Global recovery to drive significant demand for our industrial products

We are pleased to see continued improvement in our industrial businesses. Ammonia markets have been buoyed by a structural tightening in the past few months following a rebound in industrial demand, and no new major merchant capacity is expected until 2023.

Melamine markets have also tightened driven by a rebound in demand from home renovation and construction in European and US markets. Melamine quarterly contract prices have increased by 15% in the first quarter of 2021 and another 23% in the second quarter. This has strengthened our global market-leading position and is driving an expected healthy improvement in financial performance for this business in 2021.

OCI’s DEF sales in the US recorded another strong quarter in Q1 2021 with truck sales up sharply and the SCR-equipped vehicle fleet at a record high which, combined with the higher urea sales prices, supports an improving trend for Q2 and the balance of 2021.

The second quarter is also developing positively for our methanol business, as spot prices remain strong having more than tripled since reaching trough cycle levels in 2020. Demand from Methanol-to Olefins (MTO) plants in China was strong in Q1 2021 and MTO utilization rates continue to be high on the back of healthy economics. Downstream demand is expected to continue to improve as the global economy and industrial activity recovers.

Lower interest costs

We continue to significantly benefit from our refinancing activities during 2020 and have undertaken additional optimisation of our capital structure in 2021, which will deliver a further reduction in our weighted average cost of debt:

  • In February, we redeemed c.$147 million of bonds at IFCo
  • In March we announced the early redemption of c.$100 million of OCI NV bonds
  • Having met our 2021 target of 3x net leverage in Q1, and with further deleveraging expected during Q2, we anticipate a reduction of at least 175bps in the margin of our revolving credit facility from Q3 onwards



ESG – Decarbonization Initiatives Continue

We continue to prioritize high impact / no to low capex initiatives that achieve value-enhancing results in a short time, as we highlighted at our ESG Strategy Day in March. We reaffirm our guidance on our operational excellence program to deliver on energy and production efficiencies at limited or no cost. This is expected to yield at least an additional $75 million per year of EBITDA, but we believe this can be materially higher than that in an improved pricing environment.

We continue to expand our offering of low carbon products to our customers, as we will be able to produce blue ammonia at OCI Beaumont up to its full ammonia production capacity of 365 ktpa, starting H2 2021. We recently signed one agreement and one Letter of Intent (LOI) with two major industrial gases companies for the supply of low carbon hydrogen to the plant. Decarbonizing the feedstock supply will allow OCI Beaumont to reduce its carbon footprint and offer both blue ammonia and bio-methanol to our downstream customers.

In addition to our other current offerings of green ammonia at OCI Nitrogen in the Netherlands, we now have the ability to offer both blue and green ammonia, and we can materially reduce the carbon intensity of our downstream customers along the value chain and across a wide range of industries spanning food, feedstock, and fuel.

Clean Fuels

As our fuels business has large-scale potential for maritime and road transport in the future, we have established a new Clean Fuels business unit, adding low carbon products including ammonia to our current and fast-growing biofuels offering of products such as bio-methanol and bio-MTBE.

The use of ammonia or methanol as a shipping fuel is particularly promising as these products are among the best-placed alternatives to help this sector decarbonize and reach IMO targets in a cost-effective way, and the shipping industry is accelerating the safe introduction of ammonia as a marine fuel.

Since our March update, several new announcements and studies have been published in the shipping sector, including endorsement by ship owners, engine manufacturers and ports of the use of ammonia and methanol as the marine fuel of the future. Wärtsilä, alongside MAN Energy Solutions one of the leading global shipping engine manufacturers, underscored that ammonia and methanol are a more credible fuel than hydrogen; and Maersk announced the launch of the world’s first liner vessel to operate on carbon-neutral methanol in 2023, seven years ahead of the initial 2030 ambition.

ESG Strategy

Ammonia and methanol have emerged as the most promising products to drive the hydrogen economy and enable the energy transition, and are key products to create carbon-free food, fuels and industrial feedstocks, which we have taken into account in our strategic review of the methanol business.

The recent acceleration of decarbonization targets by the US and other countries is expected to result in major demand growth for cleaner fuels in particular, which would also benefit methanol as an established fuel.

Given potential synergies with ammonia and our leading positions in methanol and bio-methanol, we have taken the decision that any potential strategic action for the methanol business will be in the form of a partnership rather than a full divestment.


A conference call for investors and analysts will be hosted on Wednesday 5th May 2021 at 4:00 PM CET (3:00 PM GMT, 10:00 AM ET) by Ahmed El-Hoshy, 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:                           5082288

A conference call replay will be available until 5th June 2021. 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:                           5082288

Subscribe to email updates

Subscribe for news and stories about our business, industries, and products.

Thank you for subscribing.

Lines Effect