Earnings Release • Nov 14, 2014
Earnings Release
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Trading Update – Third Quarter 2014 Amsterdam, the Netherlands / 14 November, 2014 9:00 AM
Total product volume sold that was produced by OCI reached 1.37 million metric tons during the third quarter of 2014, a 41% increase over the same period last year, and a 24% increase compared with the second quarter of this year, primarily driven by:
Iowa Fertilizer Company, our nitrogen fertilizer plant located in Wever County, Iowa, is the first world scale natural gas-based greenfield fertilizer plant built in the United States in nearly 25 years. Construction at IFCo was 72% complete as at 30 September 2014, on track to start production in the fourth quarter of 2015. As of 30 September 2014, the project had incurred approximately \$1
1 Quarterly figures are based on unaudited results
billion in expenditures. The current estimate of the cost to complete the project has increased by about \$100 million to a total expenditure of approximately \$1.9 billion.
| Product | Region | Q3 2014 |
Q2 2014 |
% Δ | Q3 2013 |
% Δ | 9M 2014 |
9M 2013 |
% Δ |
|---|---|---|---|---|---|---|---|---|---|
| Granular Urea | Middle East, FOB | 320 | 294 | 9% | 303 | 6% | 318 | 351 | -9% |
| Granular Urea | Egypt, FOB | 358 | 360 | 0% | 335 | 7% | 377 | 394 | -4% |
| Ammonia | Arab Gulf, FOB | 498 | 467 | 7% | 440 | 13% | 475 | 523 | -9% |
| Ammonia | Yuzhnyy, FOB | 490 | 489 | 0% | 432 | 14% | 473 | 497 | -5% |
| CAN | Germany, CIF | 306 | 349 | -13% | 303 | 1% | 334 | 330 | 1% |
| UAN | France, FOT | 252 | 267 | -6% | 258 | -2% | 271 | 296 | -8% |
| Melamine | Europe ICIS | 1,742 | 1,817 | -4% | 1,812 | -4% | 1,800 | 1,874 | -4% |
| Methanol | US Gulf, FOB | 471 | 560 | -16% | 532 | -11% | 553 | 517 | 7% |
* Note that AS benchmark prices have not been provided, as the product is traded volume only
| Product – Sales Volumes | Q3 2014 |
Q2 2014 |
% Δ | Q3 2013 |
% Δ | 9M 2014 |
9M 2013 |
% Δ |
|---|---|---|---|---|---|---|---|---|
| Granular Urea | ||||||||
| OCI Product Sold | 382.3 | 315.7 | 21.1% | 289.3 | 32.2% | 1,127.7 | 563.9 | 100.0% |
| Third Party Traded | 5.0 | 0.9 | nm | 30.7 | -83.7% | 31.5 | 411.0 | -92.3% |
| Total Granular Urea | 387.3 | 316.6 | 22.3% | 320.0 | 21.0% | 1,159.2 | 974.9 | 18.9% |
| Ammonia | ||||||||
| OCI Product Sold | 390.6 | 360.1 | 8.5% | 236.2 | 65.4% | 1,063.7 | 699.3 | 52.1% |
| Third Party Traded | 168.3 | 135.4 | 24.3% | 33.0 | 410.1% | 415.7 | 101.6 | 309.2% |
| Total Ammonia | 558.9 | 495.5 | 12.8% | 269.2 | 107.6% | 1,479.5 | 800.9 | 84.7% |
| Calcium Ammonium Nitrate (CAN) | ||||||||
| OCI Product Sold | 318.5 | 177.3 | 79.7% | 236.0 | 34.9% | 878.7 | 778.0 | 12.9% |
| Total CAN | 318.5 | 177.3 | 79.7% | 236.0 | 34.9% | 878.7 | 778.0 | 12.9% |
| Urea Ammonium Nitrate (UAN) | ||||||||
| OCI Product Sold | 87.4 | 50.3 | 73.7% | 85.0 | 2.8% | 242.6 | 247.1 | -1.9% |
| Third Party Traded | 23.5 | 7.3 | 220.8% | 24.0 | -2.1% | 67.1 | 92.9 | -27.8% |
| Total UAN | 110.9 | 57.6 | 92.4% | 109.0 | 1.7% | 309.6 | 340.0 | -8.9% |
| Ammonium Sulphate (AS) | ||||||||
| Third Party Traded | 316.6 | 381.2 | -16.9% | 419.0 | -24.4% | 1,173.3 | 1,195.5 | -1.9% |
| Total (AS) | 316.6 | 381.2 | -16.9% | 419.0 | -24.4% | 1,173.3 | 1,195.5 | -1.9% |
| Total Fertilizers | ||||||||
| Total OCI Product Sold | 1,178.7 | 903.4 | 30.5% | 846.5 | 39.3% | 3,312.7 | 2,288.3 | 44.8% |
| Total Third Party Traded | 513.4 | 524.8 | -2.2% | 506.7 | 1.3% | 1,687.6 | 1,801.0 | -6.3% |
| Total Fertilizers | 1,692.2 | 1,428.2 | 18.5% | 1,353.2 | 25.1% | 5,000.3 | 4,089.3 | 22.3% |
| Industrial Chemicals | ||||||||
| Melamine | 38.3 | 43.6 | -12.2% | 34.8 | 10.0% | 123.8 | 108.5 | 14.1% |
| Methanol | 157.0 | 161.6 | -2.8% | 90.8 | 72.9% | 460.0 | 443.1 | 3.8% |
| Total Industrial Chemicals | 195.3 | 205.2 | -4.8% | 125.6 | 55.5% | 583.8 | 551.6 | 5.8% |
| Total | ||||||||
| Total OCI Product Sold | 1,374.0 | 1,108.6 | 23.9% | 972.1 | 41.4% | 3,896.5 | 2,839.9 | 37.2% |
| Total Third Party Traded | 513.4 | 524.8 | -2.2% | 506.7 | 1.3% | 1,687.6 | 1,801.0 | -6.3% |
| Total Product Volumes | 1,887.5 | 1,633.4 | 15.6% | 1,478.8 | 27.6% | 5,584.1 | 4,640.9 | 20.3% |
On 12 November 2014, the Extraordinary General Meeting of Shareholders (EGM) approved the proposals to increase the issued share capital and subsequently decrease the issued share capital of OCI N.V. with the same amount to facilitate the spin-off of the Engineering & Construction Group through a repayment of capital in kind in the form of shares in the new company, which is expected to be named Orascom Construction, to OCI N.V.'s existing shareholders.
OCI N.V. had earlier announced on 6 November 2014 its intention to pursue a dual listing of its Engineering & Construction Group in both Egypt and the United Arab Emirates. Preparations for the spin-off of the Engineering & Construction Group from OCI N.V. are underway and the new company is targeting to list on the two exchanges during the first quarter of 2015, subject to necessary Board and regulatory approvals in Egypt and the United Arab Emirates, including amendments to Egyptian Exchange rules to facilitate dual listings in Egypt.
From the date of listing of the construction business, the Fertilizer & Chemicals Group will constitute OCI N.V.'s core business and the executive management of OCI N.V. will no longer supervise and be responsible for Orascom Construction's operational and financial performance. Orascom Construction will from that date operate as an independent company with its own management and board of directors, but may continue to use certain back office services from OCI N.V. on a transitional basis.
OCI N.V.'s Board and management believe that this spin-off will effectively position each business to pursue its independent growth opportunities and enhance investor understanding and transparency of each business as each business offers a distinct pure-play value proposition to investors.
States, where new awards increased by 84% in the first nine months of 2014 compared with the same period last year.
On 4 November 2014, the Egyptian Tax Authority's (ETA) Independent Appeals Committee, the responsible body overseeing the tax dispute between OCI N.V.'s subsidiary, Orascom Construction Industries (OCI S.A.E.), and the ETA, ruled in favor of the Company.
As a result of the positive ruling, the balance of the tax liability (\$673.7 million as at 31 December 2013) will be released through the 2014 income statement. In addition, non-cash interest charges and foreign exchange gains related to the tax dispute liability will no longer appear in the profit & loss accounts. The OCI N.V. Board unanimously approved the transfer of the rights to amounts paid to the ETA in April 2013 (EGP2.5 billion or approximately \$360 million) to the Tahya Misr ("Long Live Egypt") Fund in Egypt.
As reported in OCI N.V.'s First Half 2014 Results Report, the 95%-complete Sidra Medical Centre Project in Qatar, 45% owned by OCI N.V. subsidiary Contrack, was terminated by the project owner, Qatar Foundation. The matter has been referred to the UK court of arbitration. The management of the joint venture expects a favourable verdict. However, as the outcome cannot be ascertained at this stage, provisions of \$188 million have been taken.
OCI N.V. management has reviewed and as a result written down certain Engineering & Construction Group's assets by \$129 million. These impairments pertain to certain deferred tax credits and a number of completed projects, where full recovery of certain receivables has not taken place in the allotted time period, and to the write-off of equipment and inventory in Iraq (due to the current conflict situation). All these provisions are non-cash in nature.
Today, at 16:00 CET, OCI N.V. will host a conference call for investors and analysts. The dial-in information for the conference call is:
_____________________________________________
Conference ID: 35982975
The replay access number is:
The conference call replay will be available until 13th December 2014
OCI N.V. is a global producer of natural gas-based fertilizers & industrial chemicals and an engineering & construction contractor based in the Netherlands. The Fertilizer & Chemicals Group produces nitrogen fertilizers, methanol and other natural gas based products, serving agricultural and industrial customers from the Americas to Asia. We rank among the world's largest nitrogen fertilizer producers with current production capacity of nearly 7 million metric tons in the Netherlands, the United States, Egypt and Algeria. The Engineering & Construction Group provides international engineering and construction services primarily focused 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. It ranks among the world's top global contractors. OCI N.V. employs approximately 55,000 people in 35 countries and is listed on Euronext in Amsterdam.
Hans Zayed Director Email: [email protected]
Erika Wakid Email: [email protected]
Tel: +31 (0) 6 18 251 367
For additional information on OCI N.V.: www.oci.nl OCI N.V. stock symbols: OCI / OCI.NA / OCI.AS / OCINY Mijnweg 1, 6167 AC Geleen,
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 Netherlands
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.
The Company's backlog or order book is based on management's estimates of awarded, signed and ongoing contracts which have not yet completed, and serves as an indication of total size of contracts to be executed. The figure is calculated on a proportionate consolidation basis.
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