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Methanex Inks Natural Gas-Supply Deal With Painted Pony

Methanex Corporation MEOH signed a 14-year agreement with Painted Pony Energy Ltd. Per the deal, Painted Pony will supply the bulk of the natural gas required for Methanex’s 600,000-ton methanol plant in Medicine Hat, Alberta. The agreement will come into effect in 2018.
Contracted quantities will be lower in the initial years in order to facilitate Methanex’s pre-existing natural gas forward purchase contracts. This will then increase to roughly 50,000 MMbtu/day or roughly 80-90% of the plant’s natural gas requirements from 2023.
Methanex has outperformed the industry it belongs to over the last three months. The company’s shares have moved up around 18.6% over this period compared with roughly 14.9% gain recorded by the industry.
Methanex recorded net profit (attributable to Methanex shareholders) of $32 million or 38 cents per share in the third quarter of 2017 as against a loss of $11 million or 12 cents logged a year ago.
Adjusted (barring one-time items) earnings per share for the reported quarter was 60 cents per share, beating the Zacks Consensus Estimate of 55 cents. Revenues rose roughly 41.2% year over year to $720 million.
The company expects global methanol prices to improve in the fourth quarter supported by healthy demand. Methanex anticipates production, sales of produced products and EBITDA to be higher in the fourth quarter compared with the third.
Methanex Corporation Price and Consensus

Methanex Corporation Price and Consensus | Methanex Corporation Quote

Zacks Rank & Key Picks

Methanex currently carries a Zacks Rank #3 (Hold).

Some better-ranked companies in the basic materials space are BHP Billiton Limited BHP, FMC Corporation FMC and Koppers Holdings Inc. KOP.

BHP Billiton has expected long-term earnings growth of 5.3% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

FMC Corporation has expected long-term earnings growth of 11.3% and flaunts a Zacks Rank #1.

Koppers Holdings has expected long-term earnings growth of 18% and carries a Zacks Rank #2 (Buy).

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