MEOH

Methanex Corporation: Q2 2025 Financial Summary

Business Context and Reporting Period

This Form 6-K summarizes Methanex Corporation's unaudited financial results for the three and six months ended June 30, 2025. Methanex is the world's largest producer and supplier of methanol. The reporting period is defined by a significant strategic milestone: the closing of the acquisition of OCI Global's international methanol business on June 27, 2025. This acquisition added two world-scale methanol facilities in Beaumont, Texas, a low-carbon methanol business, and an idled facility in the Netherlands to Methanex's portfolio.

Key Financial Metrics

Operational Metrics:

• Production: 1,621,000 tonnes (Q2 2025) vs. 1,619,000 tonnes (Q1 2025).
• Total Sales Volume: 2,133,000 tonnes (Q2 2025) vs. 2,217,000 tonnes (Q1 2025).
• Average Realized Price: $374 per tonne (Q2 2025) vs. $404 per tonne (Q1 2025).
• Dividends Paid: $12.5 million ($0.185 per share).

Material Changes vs. Prior Period

Net income attributable to shareholders decreased to $64 million in Q2 2025 from $111 million in Q1 2025. This decline was primarily driven by a lower average realized price ($374/tonne vs. $404/tonne) and reduced sales of Methanex-produced methanol. These negative factors were partially offset by higher net proceeds from gas sales in New Zealand ($19.5 million in Q2 vs. $8 million in Q1).

Adjusted EBITDA decreased to $183 million from $248 million in the prior quarter. The variance analysis indicates a $60 million negative impact from lower realized prices and a $12 million negative impact from lower sales volume. Conversely, total cash costs improved slightly, contributing a $2 million positive impact.

Debt levels increased significantly due to the OCI Acquisition. The company drew $550 million on Term Loan A and issued equity (9.9 million shares) to fund the transaction, which totaled approximately $1.63 billion in net assets acquired.

Outlook, Guidance, and Risks

Production Outlook: Management expects 2025 production, inclusive of newly acquired assets, to be approximately 8.0 million tonnes. Actual production remains subject to gas availability, turnarounds, and unplanned outages.

Financial Outlook: For Q3 2025, the company expects higher Adjusted EBITDA compared to Q2, driven by higher produced sales volumes, though this will be offset by a lower average realized price. Based on July and August posted prices, the expected average realized price range is $335 to $345 per tonne.

Key Risks and Contingencies:

• Gas Supply Constraints: Production in New Zealand, Egypt, and Chile remains sensitive to natural gas availability. New Zealand operations were temporarily idled in Q2 to redirect gas to the electricity market, though they restarted in early July.
• Integration Risk: The company is in the process of integrating the OCI business. Management has excluded the acquired business from the scope of internal control testing for the 2025 fiscal year due to the complexity of integration.
• Market Volatility: Methanol prices are cyclical and dependent on global economic activity, energy prices, and supply/demand fundamentals.

Investor Verification Checklist

• OCI Acquisition Integration: Verify the timeline and cost of integrating the Beaumont, Texas facilities and the low-carbon business into Methanex's operations.
• Gas Supply Contracts: Review the status of natural gas supply agreements in New Zealand and Egypt, as these are critical constraints on production capacity.
• Debt Covenants: Confirm compliance with the minimum interest coverage ratio (2:1) and funded debt to total capitalization ratio (<60%) following the increased leverage from the acquisition.
• Realized Price Trends: Monitor the divergence between posted prices and realized prices, as discounts and regional mix significantly impact margins.
• Non-GAAP Reconciliations: Review the full reconciliation of Adjusted EBITDA and Adjusted Net Income to GAAP measures to understand the impact of mark-to-market adjustments on share-based compensation and gas contracts.