29 January 2009 09:24 [Source: ICIS news]
LONDON (ICIS news)--Methanex reported a net loss of $3.1m (€2.4m) in the fourth quarter compared with a net income of $171.7m during the same quarter in 2007 due to a $33m charge to write down inventories, the Canadian methanol producer said on Thursday.
The company added that it had recorded an operating loss of $38.8m during the quarter compared with an operating income of $241.3m during the year-ago period.
Total sales volumes dropped to 1,398,000 tonnes from 1,613,000 tonnes in the fourth quarter 2007, while the average realised price for methanol fell to $388/tonne from $637/tonne a year earlier.
"The slowdown in the global economy led to a significant decline in methanol demand in the fourth quarter. This resulted in lower sales volumes and a sharp drop in methanol prices which triggered a write-down in the value of our inventories," said Bruce Aitken, president and CEO.
He added that the slowdown in demand had led to a reduction in total output, and this had provided some stability to pricing.
“Overall demand remains constrained and we expect that any recovery in demand is dependant on a more positive global economic outlook," Aitken said.
He said that despite the losses reported in the fourth quarter, the company continued to be in a strong financial position.
“With $328m of cash on hand at the end of the quarter, a strong balance sheet, no near term refinancing requirements and a $250m undrawn credit facility, we believe we are well positioned to meet our financial commitments through this period of uncertainty and continue to invest to grow the company," Aitken said.
For the full year, Methanex's net profits plummeted 90% to $172.3m from $373.7m in 2007, while operating profits fell 58% to $226.8m from $539.9m.
($1 = €0.76)
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