Methanex (MEOH) Temporarily Suspends Trinidad Operations
Methanex Corporation (MEOH) has announced temporary suspension of its Trinidad operations due to an interruption in power supply. The facilities have not been getting electrical power off the national grid.
Share price of the company fell as much as around 11.5% in the trading session following the news release. The stock closed at $51.66 last Friday, down roughly 9.5%.
The 56-inch cross-island natural gas pipeline was taken out of service by The National Gas Company of Trinidad and Tobago as it suspected an underground leak. Industrial power users on the Point Lisas estate have been affected by the suspension. The Trinidad and Tobago Electricity Commission (T&TEC) expects the national grid power to be returned in 3-5 days. Methanex is taking appropriate measures for a safe and efficient restart of the plant once power is restored.
Methanex’s production has been crippled by shortage of natural gas supplies in various regions. Other than Trinidad, restricted supply of natural gas continues to affect its operations in Chile and Egypt. The company had to temporarily halt operations at its Egypt plant in Jun 2014 due to gas supply constraints related to higher electricity demand. Methanex saw higher gas curtailments in Trinidad in the third quarter of 2014 than the second.
Methanex reported its third-quarter 2014 results on Oct 29. The company saw a 40% fall in profits from the year-ago quarter to $52 million, hurt by lower methanol pricing. The Canada-based methanol producer’s earnings of 54 cents per share (treating stock-based compensation as a normal expense) for the quarter fell well short of the Zacks Consensus Estimate of 65 cents and were below 90 cents per share, recorded a year ago.
Sales for the reported quarter also saw a dip of roughly 4% year over year to $730 million. Average realized price was $389 per ton in the third quarter, down 11% from $438 per ton a year ago.
Methanex currently carries a Zacks Rank #4 (Sell).
Other stocks worth considering in the diversified chemical space include Innospec Inc. (IOSP), Valhi, Inc. (VHI) and Celanese Corporation (CE). While Innospec and Valhi sport a Zacks Rank #1 (Strong Buy), Celanese carries a Zacks Rank #2 (Buy).
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Read the Full Research Report on VHI
Read the Full Research Report on IOSP
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