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Chemical maker Methanex Corporation MEOH recorded net loss (attributable to Methanex shareholders) of $3 million or 8 cents per share in the second quarter of 2016 as against a profit of $104 million or $1.15 per share logged a year ago.

Adjusted loss (barring one-time items other than stock-based compensation) came in at 26 cents per share for the quarter. Loss per share was narrower than the Zacks Consensus Estimate of a loss of 27 cents.              

Methanex’s adjusted loss before interest, tax, depreciation and amortization was $38 million in the quarter, reflecting a decline of roughly 70.5% from $129 million recorded a year ago. This was attributable to lower average realized prices of methanol in the quarter, more than offsetting higher production.

Furthermore, revenues fell roughly 26.6% year over year to $468 million in the reported quarter, but beat the Zacks Consensus Estimate of $423 million.

Average realized price was $223 per ton in the quarter, down roughly 36.3% from $350 per ton a year ago. Total production was 1,770,000 tons, marking a 38.2% rise from 1,281,000 tons in the prior-year quarter. Methanex-produced methanol sales volumes rose 40.4% year over year to 1,689,000 tons.

Shares of Methanex  closed roughly 2.6% lower at $27.86 on Jul 28.

Production Summary

New Zealand: Methanex produced 577,000 tons in the second quarter of 2016, up 18.5% from 487,000 tons produced a year ago. The production was strong at full to close capacity here.

United States: Methanex’s Geismar facilities produced 527,000 tons in second-quarter 2016, compared to 276,000 tons produced a year ago. The strong quarter reflects a relatively new catalyst in the facilities.

Trinidad: Methanex's fully-owned Titan facility produced 181,000 tons in the quarter, down from 183,000 tons produced a year ago. The Atlas facility, in which the company holds a 63.1% interest, produced 236,000 tons, stable year over year. In the reported quarter, the Atlas facility returned operation levels to normal after last quarter.

Egypt: The facility produced 106,000 tons (Methanex share of 53,000 tons) compared to 16,000 tons (Methanex share of 8,000 tons) produced in the prior-year quarter. The plant resumed operations in early May after discontinuing it in early March due to natural gas supply restrictions. The plant may have to be closed down again in the summer months when electricity demand in the area is at its peak.

The Egypt facility has been facing restrictions since mid-2012, with these becoming more significant since 2014. The government is working on measures to address the problem. Until then, the company will continue facing limited production at the plant.