Earnings Release • Nov 11, 2013
Earnings Release
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Trading Update – Third Quarter 2013 Amsterdam, the Netherlands / 11 November, 2013 8:00 AM
| Product – Sales Volumes1 | Q3 2013 (000 metric tons) |
Q2 2013 (000 metric tons) |
Variance (%) | Q3 2012 (000 metric tons) |
Variance (%) |
|---|---|---|---|---|---|
| Urea | 378 | 206 | 83.5% | 383 | -1.3% |
| Ammonia | 347 | 296 | 17.2% | 319 | 8.8% |
| Calcium Ammonium Nitrate | 236 | 274 | -13.9% | 368 | -35.9% |
| Urea Ammonium Nitrate | 109 | 106 | 2.8% | 63 | 73.0% |
| Ammonium Sulphate2 | 419 | 362 | 15.7% | 213 | 96.7% |
| Other3 | - | 33 | -100.0% | - | - |
| Total Fertilizer | 1,489 | 1,277 | 16.6% | 1,346 | 10.6% |
| Melamine | 35 | 35 | -0.6% | 41 | -15.1% |
The product sales volume split is as follows:
Operating rates at the Group's plants in Egypt, Egyptian Fertilizer Company (EFC) and Egypt Basic Industries Corporation (EBIC), ramped up to 62.9% and 53.0% respectively in the third quarter versus 40.5% and 32.6% respectively during the second quarter reflecting the recovery of natural gas supply following the amendment of EFC's natural gas contract with Egyptian Natural Gas Company (GASCO) and Egyptian Natural Gas Holding Company (EGAS) in August, and an agreement in principle regarding EBIC's natural gas contract. In October 2013, utilization rates further improved to 89.6% at EFC and 68.1% at EBIC.
Consolidated backlog as at 30 September 2013 stood at US\$ 6.2 billion reflecting a decrease of 2.6% as compared to last quarter and an increase of 9.6% over the same period last year.
1 Methanol sales volumes will be announced by OCI Partners LP on 18 November, 2013
2 All ammonium sulphate is traded volume and not produced by OCI N.V.
3 Other comprises intermediary products occasionally sold to third parties
Q3 2013 consolidated revenues were slightly lower compared to Q2 2013. However, EBITDA improved quarter-on-quarter, reflecting the ramp-up of fertilizer plants in Egypt as natural gas supply continued to recover throughout the quarter. The recovery in production rates has offset the recent softening of nitrogen-based fertilizer prices with the exception of nitrates. We continue to set targets for continued recovery in production rates from our Egyptian plants and are encouraged by strong operational performance at the Sorfert plant in Algeria.
Construction margins remained at relatively similar levels to the previous quarter. The third quarter included the impact of reduced working hours in the month of Ramadan across the Middle East markets.
On 5 September 2013, the NYSE Euronext Amsterdam announced that following the quarterly review of its indices, OCI N.V. would be included in the AMX index as of 23 September 2013. The AMX index is the NYSE Euronext Amsterdam's midcap index.
OCI N.V. was also included in the Euronext 100 Index effective 1 November 2013. The Euronext 100 Index is the blue chip index of Euronext NV, the pan-European exchange, and comprises the largest and most liquid stocks traded on Euronext.
We expect to be included in additional indices imminently and continue to be well positioned for inclusion in the AEX Index, the NYSE Euronext Amsterdam's largest index, in March 2014 following their annual review.
OCI N.V. held the first extension period to the tender offer for OCI S.A.E. on 29 September 2013 to 3 October 2013, during which all eligible shareholders of OCI S.A.E. could accept an exchange offer to exchange their shares into OCI N.V. shares or a cash alternative of EGP 255 per share (the "Offer").
2,449,731 OCI S.A.E. shares were tendered for cash and 528,366 ordinary shares in OCI S.A.E. elected to accept the exchange offer for shares in OCI N.V. A total of 2,978,097 shares were tendered, representing 90.21% of the total remaining OCI S.A.E. shares listed on the EGX.
OCI N.V. had earmarked sufficient treasury shares to execute the exchange offer and intends to cancel the underlying treasury shares that were earmarked for the 2,449,731 OCI S.A.E. shares that elected to accept the cash offer.
The last extension period will be held from 19 January 2014 to 23 January 2014.
On 30 September 2013, OCI N.V. re-opened its exchange offer enabling eligible holders of all remaining Regulation S global depositary receipts (GDRs) of OCI S.A.E. to tender their GDRs in exchange for ordinary shares of OCI N.V. As of the most recent close on 4 November 2013, 866,174 GDRs have been converted. The exchange offer was extended to 12 November 2013.
Following the close of the first local tender offer extension period and the re-opening of the GDR exchange offer, OCI N.V. now owns 99.30% of OCI S.A.E.
OCI N.V. expects to make an announcement for holders of American Depositary Shares (ADSs) representing ordinary shares of OCI S.A.E. in due course, subject to receipt of all relevant regulatory approvals.
In September 2013, OCI N.V. issued and settled a € 100 million equity offering together with € 339 million aggregate principal amount of senior unsecured bonds (the "Bonds") convertible into ordinary shares of OCI N.V. (together the "Offerings").
The Bonds are to be redeemed at par, will have a final maturity of 5 years and carry a coupon of 3.875% per annum payable semi-annually in arrears. The Bonds will be convertible into ordinary shares at an initial conversion price of € 34.45, representing a 30% premium to the equity offering placing price of € 26.50 per share.
The net proceeds of the Offerings were used for general corporate purposes including the financing of the extensions to OCI N.V.'s exchange offers, which have consumed US\$ 90.9 million to-date, as well as to extend the Company's existing maturity profile, and to repay existing debt facilities maturing in the next twelve months.
Excluding the cash option, the potential dilution as a consequence of conversion of the Bonds and the issuance of approximately 1.77 million new ordinary shares is 4.2%, accounting for the recent cash elections conducted under the terms of the first extension period of the local tender offer for OCI S.A.E.. Any additional cash elections during the second extension period of the local exchange offer will further reduce dilution.
On 6 November 2013, The Gavilon Group (Gavilon) reached an agreement to sell its energy business to NGL Energy Partners LP. The definitive agreement contemplates the sale of Gavilon's energy business on a cash-free, debt-free basis for a cash purchase price of US\$ 890 million, which includes approximately US\$ 200 million of working capital, subject to a customary adjustment based on a target level of working capital to be delivered by Gavilon at the closing of the proposed transaction. The transaction is expected to close in December 2013, subject to customary closing conditions.
Gavilon's energy business principally operates integrated crude oil storage, terminal and pipeline assets located in Oklahoma, Texas and Louisiana, along with a complementary crude oil and refined products supply, marketing and logistics business.
The Gavilon grains and fertilizer businesses were acquired by Marubeni for US\$ 2.7 billion equity plus the assumption of US\$ 2 billion in debt in July 2013.
OCI expects to receive total cash proceeds from its share of ownership in both businesses to exceed US\$ 660 million.
On 9 October 2013, OCI Partners LP (the "Partnership"), a subsidiary of OCI N.V., closed an initial public offering (IPO) of 17,500,000 common units representing limited partner interests in the Partnership (Common Units) at a price to the public of US\$ 18 per Common Unit resulting in an enterprise value of approximately US\$ 2 billion. The listed Common Units represent a 21.7% limited partner interest in the Partnership. OCI USA Inc., an indirect wholly owned subsidiary of OCI N.V., owns a 78.3% limited partner interest in the Partnership.
OCI Partners LP owns and operates OCI Beaumont, an integrated 730 thousand ton per year methanol and 265 thousand ton per year ammonia production facility that is strategically located on the Texas Gulf Coast. The Partnership trades on the New York Stock Exchange under the ticker symbol "OCIP."
OCI N.V. is a global nitrogen-based fertilizer producer and engineering & construction contractor based in the Netherlands. The Fertilizer Group owns and operates nitrogen fertilizer plants in the Netherlands, the United States, Egypt and Algeria and has an international distribution platform spanning from the Americas to Asia. The Fertilizer Group ranks among the world's top fertilizer producers with a fertilizer production capacity of nearly 7 million metric tons. The Construction Group provides international engineering and construction services primarily on infrastructure, industrial and high-end commercial projects in the United States, Europe, the Middle East, North Africa and Central Asia for public and private clients. The Construction Group ranks among the world's top global contractors. OCI N.V. employs more than 75,000 people in 35 countries around the globe and is listed on the NYSE Euronext in Amsterdam.
Hans Zayed Email: [email protected]
Erika Wakid Email: [email protected]
Tel: +31 (0) 618 251 367
OCI N.V. stock symbols: OCI / OCI.NA / OCI.AS / OCINY
Mijnweg 1, 6167 AC Geleen, The Netherlands
Certain statements contained in this document constitute forward-looking statements relating to OCI N.V. (the "Company"), its business, markets and/or industry. These statements are generally identified by words such as "believe," "expect," "anticipate," "intends," "estimate," "forecast," "project," "will," "may," "should" and similar expressions. Forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are outside of the Company's control and are difficult to predict, that may cause actual results to differ materially from any future results expressed or implied from the forward-looking statements.
The forward-looking statements contained herein are based on the Company's current plans, estimates, assumptions and projections. Various factors could cause actual future results, performance or events to differ materially from those described in these statements. The Company does not make any representation as to the future accuracy of the assumptions underlying any of the statements contained herein. The information contained herein is expressed as of the date hereof and may be subject to change. Neither the Company nor any of its controlling shareholders, directors or executive officers or anyone else has any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this document.
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