Methanex (MEOH) Offers Details on Trinidad & Tobago Operations
Methanex Corporation MEOH recently announced that it has signed a two-year natural gas contract with the National Gas Company of Trinidad and Tobago ("NGC") for the resumption of operations at its currently idled, fully-owned Titan methanol facility in September 2024. As the legacy 20-year natural gas agreement ends in September 2024, the company said it plans to idle the Atlas methanol facility (Methanex interest 63.1% or 1,085,000 tons of capacity) at that time.
The two-year Titan contract given by the NGC reflects the country's challenging near-term gas supply and demand circumstances, MEOH noted. In the medium to long term, the NGC continues to collaborate with the upstream industry on their intentions to boost gas supply to the country through various projects.
The company’s move to resume operations at Titan and halt operations at Atlas was due to economic factors, notably much lower capital requirements at Titan compared to Atlas. The new gas price and lower production volume in Trinidad will reduce annual adjusted EBITDA and free cash flow capabilities by roughly $80 million and $40 million, respectively, beginning in 2025 and compared with 2023, across a range of methanol prices.
Shares of Methanex have gained 24.7% over the past year compared with a 4.2% rise of its industry.
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The company, on its second-quarter call, said that it anticipates producing about 6.5 million equity tons for 2023, excluding any G3 output. Based on the timing of turnarounds, gas availability, unanticipated events, unscheduled outages and other factors, actual production may vary each quarter, it noted.
Methanex Corporation Price and Consensus
Methanex Corporation price-consensus-chart | Methanex Corporation Quote
Zacks Rank & Key Picks
Methanex currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Commercial Metals Company CMC, Carpenter Technology Corporation CRS and The Andersons Inc. ANDE.
Commercial Metals carries a Zacks Rank #1 (Strong Buy). CMC delivered a trailing four-quarter earnings surprise of roughly 21.7%, on average. The stock is up around 1.6% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology currently carries a Zacks Rank #2 (Buy). The stock has rallied roughly 86.2% in the past year. CRS beat the Zacks Consensus Estimate in three of the last four quarters while meeting in one. It delivered a trailing four-quarter earnings surprise of 9.8%, on average.
Andersons currently carries a Zacks Rank #2. The stock has gained roughly 48.6% in the past year. ANDE beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average.
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