OCI Partners LP Reports 2016 Fourth Quarter Results
[PR Newswire]
PR NewswireMarch 13, 2017
NEDERLAND, Texas, March 13, 2017 /PRNewswire/ -- OCI Partners LP, a Delaware limited partnership (the "Partnership"), announced its results for the three and twelve months ended December 31, 2016. The Partnership owns and operates an integrated methanol and ammonia production facility that is strategically located on the Texas Gulf Coast near Beaumont.
OCI Partners LP.
OCI Partners LP.
Summary of Financial Results for the Three Months Ended December 31, 2016
Revenues decreased 25% to $66 million compared to $88 million for the same period in 2015
EBITDA decreased 58% to $16 million compared to $38 million for the same period in 2015
Net loss of $17 million compared to net income of $15 million for the same period in 2015
EBITDA and net income (loss) margins were 24% and (26)% respectively, compared to 43% and 17%, respectively, during the same period in 2015
Summary of Financial Results for the Twelve Months Ended December 31, 2016
Revenues decreased 17% to $258 million compared to $309 million for the same period in 2015
EBITDA decreased 52% to $59 million compared to $123 million for the same period in 2015
Net loss of $51 million compared to net income of $52 million for the same period in 2015
EBITDA and net income (loss) margins were 23% and (20)% respectively, compared to 40% and 17%, respectively, during the same period in 2015
Buyout Offer from OCI N.V.
On December 6, 2016, the Partnership announced that its board of directors had received a proposal from OCI N.V. (OCI.AS) ("OCI") pursuant to which OCI would acquire all publicly held common units of OCI Partners in exchange for OCI N.V. shares. OCI currently owns 79.88% of issued and outstanding common units of OCI Partners. The proposed transaction is subject to the negotiation and execution of a definitive agreement and approval of such definitive agreement and transactions contemplated thereunder by the board of directors of OCI N.V., the board of directors of the general partner of OCI Partners (the "OCIP Board") and a Conflicts Committee, comprising of independent non-executive members of the OCIP Board, established by the OCIP Board, and would be subject to customary closing conditions. There can be no assurance that any such approvals will be forthcoming, that a definitive agreement will be executed or that any transaction will materialize.
Distributions
Based on the results of the three months ended December 31, 2016, the Board of Directors of the general partner of the Partnership has not approved any cash distribution. The amount of any subsequent quarterly cash distributions will vary depending on our future earnings as well as our cash requirements for working capital, capital expenditures, debt service and other contractual obligations, and reserves for future operating or capital needs.
Run-Rate Quarterly Distribution Guidance
The decision to forgo our cash distribution for the three months ended December 31, 2016 reflects an average realized methanol price of $257 per metric ton, an average realized ammonia price of $199 per metric ton, and an average natural gas price of $3.10 per MMBtu.
To assist investors in making the linkage between these prices and potential future distributions, we provide below a sensitivity analysis:
A $0.50 per MMBtu change in natural gas prices results in an approximately $0.23 impact on annual distributions
A $10 per metric ton change in methanol prices results in an approximately $0.10 impact on annual distributions
A $10 per metric ton change in ammonia prices results in an approximately $0.04 impact on annual distributions
It is our intention to continue making distributions consistent with our run-rate guidance, but there can be no assurance we will be able to do so. In addition to the impact of commodity prices, our distributions are subject to fluctuations in capacity utilization, working capital, capital expenditures, debt service and other contractual obligations, reserves for future operating or capital needs and other factors, including overall business, regulatory and financial considerations that may affect the availability of cash to distribute. Please see "Forward-Looking Statements" below."
Term B Loan and Revolver Covenant Amendments
On November 30, 2016, OCI Beaumont LLC ("OCIB"), the Partnership and OCI USA Inc. entered into an amendment to its Term Loan B Credit Facility ("Term Loan"). The amendment, among other things, improved the Term Loan's financial covenants. Concurrently, OCIB agreed to prepay $200 million of term loans under the Term Loan B Credit Facility with the proceeds of a borrowing from its parent company OCI N.V. through an Intercompany Term Facility. The borrowings under the Intercompany Term Facility are subordinated to the existing Term Loan.