Table of Contents
Key Points:
- OCI Global reports a 12% revenue drop in Q2 2024, from $1.4 billion to $1.2 billion, due to lower selling prices.
- Despite revenue slump, OCI generates $108 million in operating free cash flow, reducing net debt to $3.9 billion.
- OCI agreed to sell its OCI Clean Ammonia project for $2.35 billion to Woodside Energy, aiming to enhance financial flexibility.
OCI Global, a leading producer and distributor of nitrogen and methanol products led by Egyptian billionaire Nassef Sawiris, reported a notable 12-percent year-over-year decline in revenue for the second quarter of 2024. The company’s top-line performance fell from $1.4 billion to $1.2 billion, marking a significant downturn.
This comes on the heels of OCI Global’s recent agreement to divest its OCI Clean Ammonia project in Beaumont, Texas, to Woodside Energy Group for $2.35 billion, a strategic move aimed at optimizing its portfolio and enhancing financial flexibility.
OCI battles headwinds, posts lower earnings
The decline in revenue is primarily attributed to reduced average selling prices across its product portfolio, influenced by global economic conditions, geopolitical tensions, and fluctuations in energy costs. Despite these challenges, OCI has been working to optimize its operations and mitigate the impact of these headwinds.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the quarter also experienced a decline, falling nine percent year-over-year to $296 million. This decrease was partially offset by lower global natural gas prices, which provided a $22-million boost, and reduced losses from gas hedges in the United States.
OCI cuts debt amid revenue slump, focuses on asset sales
Despite the revenue decline, OCI generated $108 million in operating free cash flow and reduced its net debt to $3.9 billion. The company is continuing its strategy of asset divestment to strengthen its balance sheet and return capital to shareholders.
CEO Ahmed El-Hoshy emphasized OCI’s focus on efficiency gains and decarbonization, highlighting the company’s commitment to maintaining its leadership in the low-carbon energy market. Despite the tough market conditions, OCI is continuing to advance its strategic goals, positioning itself for long-term growth and sustainability.
OCI: Global industrial titan under Nassef Sawiris’ leadership
Under the visionary leadership of Nassef Sawiris, who holds a significant 38.8 percent stake in the group, OCI has transformed into a global powerhouse with an impressive annual production capacity of 17.2 million metric tonnes across four continents.
The company’s diverse portfolio includes hydrogen-based products such as nitrogen fertilizers, methanol, biofuels, and more, solidifying its position as a leader in the industry. Despite navigating a complex and challenging operating environment, OCI remains steadfast in its commitment to excellence.
Guided by Sawiris, Egypt’s wealthiest individual and Africa’s fourth-richest billionaire, the company is focused on enhancing operational performance, optimizing cost management, and driving sustainable growth. To achieve this, OCI plans to utilize proceeds from asset divestment to reduce debt and deliver value to shareholders through capital returns.
