• Methanol prices reached multi-year highs leading to net income attributable to Methanex shareholders of $71 million and Adjusted EBITDA of $264 million
• Restarted construction on our advantaged Geismar 3 project which has been substantially de-risked and is well-positioned to be completed on-time and on budget with commercial operations targeted by late 2023/early 2024

• Recently announced a reset of our quarterly dividend to $0.125 per share and approval of a 5% share repurchase program
• Robust outlook for the fourth quarter as global energy shortages and rising feedstock costs are leading to a sharp increase in methanol prices and a significant steepening of the industry cost curve
• In early October, restarted production at our Chile IV plant (annual operating capacity of 830,000 tonnes), which was idle for 18 months

For the third quarter of 2021, Methanex (TSX:MX) (NASDAQ:MEOH) reported net income attributable to Methanex shareholders of $71 million ($0.93 net income per common share on a diluted basis) compared to net income of $107 million ($1.31 net income per common share on a diluted basis) in the second quarter of 2021. The decrease in net income is due to the change in the mark-to-market impact of share-based compensation. Adjusted EBITDA for the third quarter of 2021 was $264 million and Adjusted net income was $99 million ($1.29 Adjusted net income per common share). This compares with Adjusted EBITDA of $262 million and Adjusted net income of $95 million ($1.24 Adjusted net income per common share) for the second quarter of 2021.

Our Adjusted EBITDA results of $264 million, reflecting a higher average realized price offset by lower sales of Methanex-produced methanol, continue to highlight the significant leverage that our earnings have to methanol prices. Methanol market conditions remained tight with continuing industry supply challenges through the third quarter of 2021. We increased our average realized price to $390 per tonne in the third quarter, a $14 per tonne increase compared to $376 per tonne in the second quarter.

We ended the third quarter with $932 million in cash. We recently finalized definitive agreements for our recently announced strategic shipping partnership between Methanex, Waterfront Shipping (a Methanex subsidiary) and Mitsui O.S.K. Lines, Ltd. ("MOL") whereby MOL will acquire a 40% minority interest in Waterfront Shipping for $145 million. The closing is subject to all customary conditions being met, including regulatory approval.

We recently restarted construction on our Geismar 3 project, a 1.8 million tonne methanol plant adjacent to our existing Geismar 1 and Geismar 2 plants. Our Geismar 3 project has distinct project advantages and robust project economics that will strengthen our asset portfolio and significantly increase our future cash generation capability.

John Floren, President & CEO of Methanex, said, “Our outlook for the methanol industry is positive, and we believe that new industry supply will be needed to meet growing methanol demand over the coming years. Our strategy of industry leadership, low cost and operational excellence enables us to generate robust free cash flow across the methanol price cycle. Our capital allocation priorities remain the same. We are well positioned to maintain our business, pursue value accretive growth opportunities and continue our long track record of returning excess cash to shareholders through a sustainable dividend and share buybacks.”

FURTHER INFORMATION

The information set forth in this news release summarizes Methanex's key financial and operational data for the third quarter of 2021. It is not a complete source of information for readers and is not in any way a substitute for reading the third quarter 2021 Management’s Discussion and Analysis ("MD&A") dated October 27, 2021 and the unaudited condensed consolidated interim financial statements for the period ended September 30, 2021, both of which are available from the Investor Relations section of our website at www.methanex.com. The MD&A and the unaudited condensed consolidated interim financial statements for the period ended September 30, 2021 are also available on the Canadian Securities Administrators' SEDAR website at www.sedar.com and on the United States Securities and Exchange Commission's EDGAR website at www.sec.gov. 

FINANCIAL AND OPERATIONAL DATA

¹ Methanex-produced methanol represents our equity share of volume produced at our facilities and excludes volume marketed on a commission basis related to the 36.9% of the Atlas facility and 50% of the Egypt facility that we do not own.

² Methanex average non-discounted posted price represents the average of our non-discounted posted prices in North America, Europe and Asia Pacific weighted by sales volume. Current and historical pricing information is available at www.methanex.com. 

³ Average realized price is calculated as revenue, excluding commissions earned and the Egypt non-controlling interest share of revenue, but including an amount representing our share of Atlas revenue, divided by the total sales volume of Methanex-produced and purchased methanol.

A reconciliation from net income (loss) attributable to Methanex shareholders to Adjusted net income (loss) and the calculation of Adjusted net income (loss) per common share is as follows:

• We recorded net income attributable to Methanex shareholders of $71 million during the third quarter of 2021 compared to net income of $107 million in the second quarter of 2021. The decrease in net income is due to the change in the mark-to-market impact of share-based compensation. We recorded Adjusted EBITDA of $264 million for the third quarter of 2021 compared with $262 million for the second quarter of 2021.
• We recorded Adjusted net income of $99 million for the third quarter of 2021 compared to Adjusted net income of $95 million for the second quarter of 2021. Adjusted EBITDA and Adjusted net income for the third quarter of 2021 are marginally higher than the second quarter of 2021 primarily due to the increase in our average realized methanol price to $390 per tonne from $376 per tonne, offset by lower sales of Methanex-produced methanol.
• We sold 2,757,000 tonnes in the third quarter of 2021 compared to 2,830,000 tonnes for the second quarter of 2021. Sales of Methanex-produced methanol were 1,435,000 tonnes in the third quarter of 2021 compared with 1,582,000 tonnes in the second quarter of 2021.
• Production for the third quarter of 2021 was 1,480,000 tonnes compared with 1,505,000 tonnes for the second quarter of 2021. Production is lower for the third quarter of 2021 primarily due to the temporary idling of one plant in New Zealand which was partially offset by higher operating rates in Egypt.
• We recently restarted construction on our Geismar 3 project, a 1.8 million tonne methanol plant adjacent to our existing Geismar 1 and Geismar 2 plants. The project has been significantly de-risked and is well-positioned to be completed on-time and on budget. We have capitalized $455 million on the project, before capitalized interest and finance charges. We estimate $800-900 million of capital expenditure to complete the project, for a total of $1.25 - $1.35 billion. Commercial operations are targeted at the end of 2023 or early 2024.
• During the third quarter of 2021 the Board of Directors approved a 5% normal course issuer bid to repurchase up to 3,810,464 common shares. To September 30, 2021, we repurchased 85,607 common shares under the bid for $4 million.
• In the third quarter of 2021 we paid a $0.125 per common share quarterly dividend to shareholders for a total of $10 million.
• At September 30, 2021, we have a strong liquidity position including a cash balance of $932 million and $900 million of undrawn backup liquidity.

PRODUCTION HIGHLIGHTS

¹ Operating capacity includes only those facilities which are currently capable of operating, but excludes any portion of an asset that is underutilized due to a lack of natural gas feedstock over a prolonged period of time. The operating capacity of our production facilities may be higher than original nameplate capacity as, over time, these figures have been adjusted to reflect ongoing operating efficiencies at these facilities. Actual production for a facility in any given year may be higher or lower than operating capacity due to a number of factors, including natural gas composition or the age of the facility's catalyst. We review and update the operating capacity of our production facilities on a regular basis based on historical performance.

² The operating capacity of New Zealand is made up of the two Motunui facilities and the Waitara Valley facility. The New Zealand facilities are capable of producing up to 2.4 million tonnes annually, depending on natural gas composition and availability. Annual Operating Capacity is currently 2.2 million tonnes based on the natural gas composition expected for the foreseeable future. The Waitara Valley plant is currently idled indefinitely due to insufficient natural gas availability.

³ For the comparative 2020 periods presented, our operating capacity in Geismar was 2.0 million tonnes. In the fourth quarter of 2020, we completed the debottlenecking project at our Geismar 1 facility and in Q2 2021 we completed the debottlenecking project at our Geismar 2 facility. As a result, we have increased our operating capacity for 2021 by 0.2 million tonnes to 2.2 million tonnes.

⁴ The operating capacity of Trinidad is made up of the Titan (100% interest) and Atlas (63.1% interest) facilities. The Titan plant remains idled indefinitely.

Key production and operational highlights during the third quarter and production outlook for 2021 include:

• New Zealand produced 268,000 tonnes compared with 306,000 tonnes in the second quarter of 2021. In New Zealand, our production levels were lower in the third quarter of 2021 compared to the second quarter of 2021 as the short term commercial arrangement with Genesis Energy to idle one plant and make natural gas available to support a tight New Zealand electricity market completed in late August. Subsequently, both Motunui plants have been operating.
• As a result of the above and the previous idling of Waitara Valley, we now estimate production in 2021 to be 1.3 million tonnes compared to our production of 1.7 million tonnes in 2020. The upstream gas sector in New Zealand is completing several field development projects that could improve gas availability over the coming years.
• Geismar produced 478,000 tonnes during the third quarter of 2021 compared to 484,000 tonnes during the second quarter of 2021. Geismar production is comparable for the second and third quarters of 2021 as the benefits of increased capacity for a full quarter following the completion of our Geismar 2 debottlenecking project during the second quarter were offset due to a precautionary outage during Hurricane Ida for approximately two weeks. Hurricane Ida did not damage the site and following the precautionary outage both plants returned to production. The Geismar 1 and Geismar 2 debottlenecking projects increased our operating capacity for our Geismar facilities by 10%, to 2.2 million tonnes on an annual basis.
• Trinidad produced 296,000 tonnes (Methanex interest) during the third quarter of 2021 compared with 294,000 tonnes in the second quarter of 2021. Production levels in Trinidad were similar in the third quarter of 2021 compared to the second quarter of 2021 as we continued to run our Atlas plant at high operating rates. Based on current gas deliveries, we estimate Trinidad production in 2021 of approximately 1.1 million tonnes (Methanex interest). Titan remains idled indefinitely.
• Chile produced 124,000 tonnes during the third quarter of 2021 compared to 128,000 tonnes during the second quarter of 2021. Production for the third quarter of 2021 is similar compared to the second quarter of 2021 as we experienced lower gas availability during the second and third quarters of 2021 over the Southern hemisphere winter months when seasonal demand for natural gas in the region is at its peak. Early in October, we restarted our Chile IV plant after idling the plant in April 2020 in response to the global pandemic and then due to lower gas availability. We expect to have sufficient gas to operate both Chile plants through the Southern hemisphere summer months to the end of April 2022. We estimate production in 2021 of 0.8 million tonnes.
• Egypt produced 310,000 tonnes (Methanex interest - 155,000 tonnes) in the third quarter of 2021 compared to 268,000 tonnes (Methanex interest - 134,000 tonnes) in the second quarter of 2021. Production levels in Egypt were higher in the third quarter compared to the second quarter of 2021 due to improved operating rates. We expect to receive 100% of our contracted gas supply for the foreseeable future in Egypt.
• Medicine Hat produced 159,000 tonnes during the second and third quarters of 2021.

CONFERENCE CALL

A conference call is scheduled for October 28, 2021 at 11:00 am ET (8:00 am PT) to review these third quarter results. To access the call, dial the conferencing operator fifteen minutes prior to the start of the call at (416) 340-2217, or toll free at (800) 806-5484. The passcode for the call is 1196073#. A simultaneous audio-only webcast of the conference call can be accessed from our website at www.methanex.com and will also be available following the call. A playback version of the conference call will be available until November 27, 2021 at (905) 694-9451, or toll free at (800) 408-3053. The passcode for the playback version is 4105032#.

ABOUT METHANEX

Methanex is a Vancouver-based, publicly traded company and is the world’s largest producer and supplier of methanol to major international markets. Methanex shares are listed for trading on the Toronto Stock Exchange in Canada under the trading symbol "MX" and on the NASDAQ Global Market in the United States under the trading symbol "MEOH".

FORWARD-LOOKING INFORMATION WARNING

This third quarter 2021 press release contains forward-looking statements with respect to us and the chemical industry. By its nature, forward-looking information is subject to numerous risks and uncertainties, some of which are beyond the Company's control. Readers are cautioned that undue reliance should not be placed on forward-looking information as actual results may vary materially from the forward-looking information. Methanex does not undertake to update, correct or revise any forward-looking information as a result of any new information, future events or otherwise, except as may be required by applicable law. Refer to Forward-Looking Information Warning in the third quarter 2021 Management's Discussion and Analysis for more information which is available from the Investor Relations section of our website at www.methanex.com, the Canadian Securities Administrators' SEDAR website at www.sedar.com and on the United States Securities and Exchange Commission's EDGAR website at www.sec.gov. 

NON-GAAP MEASURES

The Company has used the terms Adjusted EBITDA, Adjusted net income (loss), Adjusted net income (loss) per common share, Adjusted revenue and operating income (loss) throughout this document. These items are non-GAAP measures that do not have any standardized meaning prescribed by GAAP. These measures represent the amounts that are attributable to Methanex Corporation shareholders and are calculated by excluding the mark-to-market impact of share-based compensation as a result of changes in our share price and the impact of certain items associated with specific identified events. Refer to Additional Information - Supplemental Non-GAAP Measures on page 13 of the Company's MD&A for the period ended September 30, 2021 for reconciliations to the most comparable GAAP measures. Unless otherwise indicated, the financial information presented in this release is prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

For further information, contact:

Kim Campbell
Director, Investor Relations
Methanex Corporation
604-661-2600