Methanol producer Methanex (TSX:MX) reported a 304% increase in year-over-year profit for the second quarter, but production stalls resulted in profit dropping 60% when compared with the first quarter of 2010.
Methanex posted a profit of US$11.7 million in the second quarter and produced 765,000 tonnes of methanol compared with 967,000 tonnes in Q1 2010 and 895,000 tonnes in Q2 2009. Sales volumes declined with Methanex selling 900,000 tonnes of methanol in the second quarter compared with 924,000 tonnes in Q1 2010 and 941,000 tonnes in Q2 2009.
The company’s Chilean methanol facilities have operated significantly below capacity since Argentina began curtailing supplies to the company in 2009. Additionally, a Chilean state-owned energy company delivered less gas to Methanex in order to meet residential consumer demand in southern Chile during the winter.
Methanex restarted a second plant in Chile in December 2009. Throughout the first quarter of 2010, it operated two plants, each at approximately 60% capacity. In early April, one plant went offline as a result of an insufficient supply of natural gas from the state-owned energy company Empresa Nacional del Petroleo. The company is anticipating increased supply and demand in the coming months, which will allow it to restart the plant later this year.
The goal is to progressively increase production and ultimately return to operating all four of its plants in Chile with natural gas from Chilean suppliers.
Production in Trinidad also declined, largely due to a 60-day outage that occurred at one of the plants Methanex co-owns on the island nation.
Production at its New Zealand facilities improved during the second quarter with the company finalizing natural gas contracts with a number of suppliers that will allow it to continue operating its 900,000-tonne Motunui plant until the end of 2011. The company currently has 1.4 million tonnes per year of idled capacity in New Zealand.
Methanex’s share price range during the past week: between $23.50 and $ 24.36; 52-week high: $27.34; 52-week low: $16.70.