Operator: Hello, everyone and welcome to the OCI H2 2024 Results Call. My name is Nadia, and I'll be coordinating the call today. [Operator Instructions] I will now hand over to your host, Sarah Rajani, Vice President, Investor Relations and Communications to begin. Sarah, please go ahead.

Sarah Rajani: Thank you.

Good afternoon, and good morning to our audience in the Americas. Thank you for attending the OCI Global second-half 2024 conference call. With me today are Hassan Badrawi, our Chief Executive Officer; and Beshoy Guirguis, our Chief Financial Officer. On this call, we will provide an overview of OCI's 2024 audited results and an overall update on our business and strategic developments. We will end the call with the usual Q&A.

The press release, investor presentation and annual report, which contain financial statements are available on our website at oci-global.com. We will be referring to slides in the investor presentation during this call. I'd like to remind you that any forward-looking statements made on this call involve risks and the actual results could differ materially from those statements. Let me hand it over to Hassan.

Hassan Badrawi: Thank you, Sarah.

As always, we start by reaffirming our strong commitment to safety, which is a central focus to the organization. On slide three of the presentation, you can see our 12-month rolling recordable incident rate was 0.43 incidents per 200,000 working hours at the end of December. Throughout this transitional period, the team at OCI has remained committed to putting health and safety first, and to delivering operational excellence across our facilities as our divested operations have been transferred to new ownership. In this regard, we continue to work closely with local authorities to investigate and understand the circumstances regarding the tragic incident in October at the Clean Ammonia facility in Beaumont, Texas. And I would like to thank all my colleagues across OCI for the professionalism and integrity in navigating this incident and this period of transition.

It's been a year of significant transactions, key execution milestones and projects, and major turnarounds in almost all of our assets, so the team has been quite busy. Before I provide further commentary on our business and strategic development, I'd like to hand over to Beshoy Guirguis, our CFO, for commentary on the financial results. Beshoy?

Beshoy Guirguis: Thank you, Hassan, and welcome, everyone. Turning to slide five and the full-year financial summary. On a full year basis, we generated revenue from total operations, which includes both our continuing and discontinued operations of $4.1 billion, an adjusted EBITDA of $826 million and a reported net profit attributable to shareholders of $5 billion.

This reflects a substantial gain on sale of subsidiaries during the period. On a continuing operations basis, which comprises of our European Nitrogen segment and our Corporate Entities, OCI reported full-year revenues of $975 million and then an adjusted EBITDA loss of $32 million. Focusing on the operating segments, adjusted EBITDA in our European Nitrogen segment was $55 million for the full year. Notwithstanding higher production volumes sold year-on-year, the adjusted EBITDA for the segment decreased to $7 million in the second half of 2024, primarily as a result of lower nitrate prices, higher gas prices and increased EUA charges. Going forward at a macro level, we expect our European business to benefit from materially lower gas prices as TTF returns to historical norms, as well as improved fertilizer pricing supported by an evolving regulatory framework with the phased introduction of CBAM in 2026 and the proposed EU tariffs on Russian and Belarusian imports later this year.

Our first quartile cost position in Europe continues to strengthen with $15 million of achieved energy efficiencies in 2024. Decline in continuing operations, other adjusted EBITDA accounts for a corporate cost base that is still being reconfigured towards a more sustainable footprint following the recent divestments. Note that the year-on-year second half increase in underlying corporate costs reflects a stop to corporate recharges for these divested businesses as well as a lag in achieved cost savings relative to the timing of transaction closings in 2024. The increase also includes certain non-recurring and restructuring costs that were not treated as one-offs. Notwithstanding these considerations, OCI continues to make substantial progress in right-sizing its corporate cost base to better serve the continuing structure and scale of the business, with corporate headcount 70% lower today compared to its peak in 2023.

OCI expects to beat its previously guided target of $30 million to $40 million in corporate costs on a run rate basis by the end of 2025. With respect to OCI's methanol business, where the company remains exposed to cash flows until the completion of the sale to Methanex. Adjusted EBITDA increased from $39 million in the second half of 2023 to $91 million in the second half of 2024. The improvement was driven by higher methanol and ammonia prices in spite of lower own-produced sales compared to the same period last year. Turning to slide six, and the cash bridge for continuing operations over the period.

This bridge shows the evolution of our $2.2 billion net debt position from the 30th of June 2024 to a net cash position of $1.4 billion as of the end of 2024. Please note that continuing operations net debt as of the 30th of June last year was restated for the deconsolidation of OCI's methanol business. Breaking down the key drivers. The second half of 2024 saw several large cash inflows related to the completion of transactions as part of the strategic review. This included $3.6 billion in gross proceeds following the closing of the IFCo divestment in August, $1.9 billion in proceeds following the Clean Ammonia closing in September, and $3.2 billion in proceeds following the close of Fertiglobe in October.

A key consideration in this regard -- a few key considerations in this regard. The net proceeds received by OCI from the IFCo transactions amounted to approximately $2.6 billion after adjusting for bond defeasance mark-to-market on outstanding hedges, networking capital and net debt positions and other transaction-related costs. For Clean Ammonia, 20% of the purchase price consideration equivalent to $470 million remains outstanding pending project completion, which we expect in the second half of this year. As of 31st December 2024, total cash spent on the project totaled $954 million out of a budget of $1.55 billion, which includes contingency and was reviewed by PWC as part of their year-end audit. The Fertiglobe cash flow represents a $3.6 billion gross purchase price less a contingent consideration held in escrow of $362 million, and a previously disclosed purchase price adjustment of $70 million.

Collection of the contingent consideration is dependent on the materialization of certain indemnifications agreed with ADNOC as part of the transaction. These indemnifications relate to several matters which are governed by confidentiality clauses. Management's estimate is that the amount held in escrow will cover the indemnification. Overall, we have taken a conservative approach in our financial statements with potential upside as we work towards improving our estimated and contingent liabilities as they relate to Fertiglobe and Clean Ammonia. The bar with OCI cash flows in the bridge includes the settlement of a securitization facility at OCI Methanol, which is expected to be recovered as part of the closing adjustments in the transaction, as well as operational cash flows from our methanol and European Nitrogen businesses, as well as other corporate items.

I will now hand back to Hassan.

Hassan Badrawi: Thanks, Beshoy. Turning to slide eight, as a backdrop, this slide provides an update on the four announced transactions and the use of proceeds to date. We continue to expect the sale of OCI Methanol for Methanex to close in the second quarter of 2025 subject to receipt of regulatory approvals. Also in regards to our methanol business concerning the dispute with OCI's joint venture partner Proman in respect to the Natgasoline assets on the 29 of January 2025 OCI received a favorable decision from the Delaware Court of Chancery.

A last minute appeal by Proman was subsequently irrevocably withdrawn and as a result the Court's ruling in OCI's favor is now final. Following this successful resolution, OCI's indirect interest in the Natgasoline joint venture will be included as part of the transaction. On OCI Clean Ammonia, renamed to Beaumont New Ammonia by Woodside, the project remains on track for completion in the second half of the year. We continue to be responsible for the construction, commissioning and startup of the facility and have a financial obligation to pay for the remaining capital expenditure and operating costs through project completion. Construction, as mentioned earlier, is well advanced as you can see from the images on slide 21, with $954 million spent by year-end out of a total investment cost that we've estimated to be $1.55 billion, including contingencies, and which has been validated as part of the year and ordered by PWC.

With regards to the use of proceeds, we've initiated the following corporate actions during the second half of the year. We've repaid $1.8 billion in debt, we mentioned earlier the buyout of minorities in OCI Methanol, and we've returned approximately $3.3 billion of capital to shareholders through the repayment of capital and cash dividends. Following this extraordinary distribution, OCI has a remaining fiscal reserve balance of EUR1.36 billion, or the equivalent of $1.5 billion, which is available for future capital repayment in the same manner. Finally, we continue to expect to make further the extraordinary distributions of up to $1 billion in the second quarter of 2025 via repayment of capital or as a cash dividend if shareholders choose to elect as previously guided. Turning to slide nine.

This slide highlights OCI's key assets and liability considerations in the wake of various strategic developments the company has undertaken. The company had a gross cash position of $2.1 billion as at the end of 2024, which is to be offset by the expected distributions of up to $1 billion, which is of course subject to all the necessary approvals. The right hand side of the slide captures a zoom out of our remaining assets and current receivables offset by some of the company's key liabilities. As mentioned earlier by Beshoy, we have taken a prudent and conservative accounting approach across our financials on several key items, including the Fertiglobe consideration held in escrow and the presentation of indemnities, also in relation to the measurement of liabilities on Clean Ammonia and various other accounting matters within the standalone financials. Starting with assets and current receivables.

Continuing operations today comprise OCI's European Nitrogen assets, namely our production facilities in Geleen, a competitively positioned nitrates, ammonia, AdBlue and melamine production platform and OTE, the only independent or one of the only independent ammonia import terminals in Europe, which is solely dedicated to third-party sales and uniquely located in the Port of Rotterdam with a license -- with license to grow further and a leading pan European distribution platform enabled by OCI's last mile logistic capabilities and unique terminal access. With the expected close of OCI Methanol transaction in the second quarter, subject to the required regulatory approvals, we expect gross proceeds of approximately $1.6 billion, comprising a cash consideration of $1.2 billion, and an equity consideration equivalent to 9.9 million shares in Methanex. We expect to receive 20% deferred consideration respect of the OCI Clean Ammonia transaction upon project completion in the second half of 2025, which is the $470 million mentioned earlier. And as previously referenced, collection or -- of the Fertiglobe or part of the Fertiglobe contingent consideration is dependent on the materialization of certain indemnifications agreed with ADNOC as part of the overall deal, and that is something we'll continue to work on going forward. On the liability side, some key considerations include the contractual commitment to complete the Clean Ammonia project.

There are also some transaction related costs and other non-recurring items, restructuring costs and hedge -- gas hedge related costs as we execute all the remaining transactions. With respect to OCI's capital structure, that is something that we will be reviewing on a continuous basis as we achieve the various milestones in our strategic roadmap. In closing, I wish to extend my thanks to the entire OCI team for their value contribution across our subsidiaries and the corporate organization. And with that, we conclude our prepared remarks and we would like to open the forum for our usual Q&A.

Operator: Thank you.

[Operator Instructions] The first question goes to Christian Faitz of Kepler Cheuvreux. Christian, please go ahead.

Christian Faitz: Yes. Thanks. Good afternoon, and good morning, everyone.

Thanks for taking my questions. Two please. First of all, are you still looking for strategic options of OCI Nitrogen Europe, and how is incoming interest going? Second, can you elucidate a bit, there's still $362 million contingent consideration you are expecting for Fertiglobe? That's it, thank you.

Hassan Badrawi: Regards -- thanks, Christian. In regards to your first question, we will be and continue to evaluate all our -- all of our strategic options for OCI going forward at all levels.

And that's all I can say at this juncture. In respect to your second question, as, as described in our prepared remarks by Beshoy and myself, we have taken a conservative approach in regards to potential indemnifications pertaining to this transaction. We've actually done so across our financial statements, because it's a unusual set of circumstances as we transition through these, these deals. This cash is held in escrow and the management will work going forward to improve the leakage associated with any of these potential contingent liabilities.

Christian Faitz: Okay.

Thanks very much.

Operator: Thank you. The next question goes to Aron Ceccarelli of Berenberg. Aaron, please go ahead.

Aron Ceccarelli: Hello.

Hi, good afternoon. I have just one question. It's on again on the slide seven of your presentation. On the transaction costs and related one-off expenses and gas hedges. I think in Q3 you mentioned a figure up to $400 million, if I remember correctly.

Do you have more visibility today of how that figure could look like? Thank you.

Hassan Badrawi: Hi. I think that $400 million number was actually part of a question, and we said that that's a bit of an inflated number relative what we think we can -- we will end up with. But that was part of a question asked to me and not part of the response. Overall, you know, other than transaction fees associated with payments advisors, legal advisors, financial advisors, we do have some one-off restructuring costs as we downsize our organization to make it fit-for-purpose for the new size that we find.

And there may be further adjustments going forward depending on the strategic roadmap that we undertake. But we haven't given any specific guidance on what the total quantum will be, but the numbers that you see represents cost paid for related to closed deals.

Aron Ceccarelli: Okay. And if I may, a follow up just on the $362 million on escrow account. Since the Fertiglobe transaction is now closed, how long will it take in order to have a clearer idea about the potential collection of this cash?

Hassan Badrawi: Difficult to give you an exact response, but it is all I can say, these are active files that we hope to reach conclusions on, in due course.

Aron Ceccarelli: Thank you.

Operator: The next question goes to Mazahir Mammadli of Redburn. Mazahir, please go ahead.

Mazahir Mammadli: Thank you. Hi, thanks for taking my questions.

So, just one question from me. If I look at your net cash balance, it's at $1.4 billion right now, and it looks like you will have another $2 billion of income in cash and $1 billion of outflow to dividends, which puts your H2 of this year cash position at something like $2.4 billion. Any color on what is the course of action, you know, what, what you are planning to do with that cash balance? Thank you.

Hassan Badrawi: Sorry, I was on mute. No, I mean, this is the -- one of the most common questions we've had over the past several quarters, since we started executing the multitude of transactions that have gotten us to this point.

I mean, the, the figures that you mentioned, at least on a gross basis, are correct. You know, what this does is that it affords us a lot of strategic optionality going forward. And as we've mentioned in the past, you know, we continue to evaluate the strategic roadmap for OCI going forward and we do not preclude further distributions of capital to shareholders as an avenue going in the future as well. So at this stage, can't give you an explicit answer, but we are highly cognizant that all, all options are available are on the table, including significant incremental returns of capital to shareholders.

Mazahir Mammadli: Thank you.

Operator: Thank you. We have no further audio questions. I'll hand back to Sarah for any written questions.

Sarah Rajani: Thank you. We have a question from [Rutger Büchner] (ph) on the website -- on the webcast.

And could you please clarify the company's intentions regarding the remaining outstanding bonds? And a second question from Rutger, recently there's been significant interest from major players in the terminals at the port of Rotterdam. Is OCI evaluating the potential sale of these assets as well?

Hassan Badrawi: Maybe I'll start with the second question. And it is true, we have -- we're, we're also aware that with the structural long-term decrease in ammonia capacity in Europe, even though we've seen some recent upstarts as TTF gas normalizes. We have over the past five years seen a consistent trend of permanent shutdowns as well, and no new building of capacity in Europe, that's for sure. And with the limited infrastructure and busy infrastructure in the transport landscape in Europe, assets such as our -- such as our terminal in Rotterdam have increased in value.

And I believe it's one of the reasons why we had started a journey of extension of the terminal over the past couple of years. It's a very, you know, long winded process to secure permits, to find the rights and to satisfy all the criteria. And that's something we've been working on for some time and have started a path to doubling our throughput in our existing terminal with potential further expansion upside available to us over the coming couple of years. So, that's something that we continue to work on. And we do agree that the value of such infrastructure has consistently gone up.

On the bonds, Beshoy?

Beshoy Guirguis: Yes. So with respect to the 2033 bonds, we are viewing the closing of the MetCo transaction as a significant milestone and we're planning to undergo a review of our capital structure at that point. And we're -- you know, we intend to act responsibly in terms of how we would deal with the bonds at the time.

Sarah Rajani: We have a second question on the webcast from Valentin Shearer, regarding potential reinvestment opportunities. Would you consider making an acquisition subject to a vote by a majority of minorities, for example, like a SPAC?

Hassan Badrawi: We can't comment at this time on future capital allocation or strategic initiatives.

I think we're -- as I mentioned in our last call, we're extremely focused on executing the existing strategic initiatives. We have, you know, over $2 billion worth of proceeds we need to finalize and complete on including completing the first blue ammonia, one of the first blue ammonia plants in the United States. And as we evaluate our options going forward, we will be able to, we hope in the near-term to communicate to our stakeholders in a meaningful way our plans for the future.

Sarah Rajani: I have another question from Attali Sophie, what will you do with your Methanex shares after the transaction closes? Is there a lockup period?

Hassan Badrawi: I believe it's public information that we have approximately four months lockup on the shares in addition to some various other considerations, legal considerations. But at this time we have not given any guidance on our intention in, in regard to this matter.

Sarah Rajani: Question from Alexandra Wallet. Do you have a timeframe for when you will be able to give further clarity on the strategic direction of OCI?

Hassan Badrawi: Like I mentioned in my answer to the question before last, we, we hope that in, in short order, we provide the market with some visibility. Looking at the history of OCI, we have consistently taken strategic decisions with a focus on enhancing value for our shareholders, and that is something that we continue -- will continue to do going forward. And as soon as we have material information to share on the direction of travel going forward, we will proactively share it with our stakeholders.

Sarah Rajani: There are no further questions on the webcast at this time.

Thank you.

Operator: Thank you. And as a reminder on…

Hassan Badrawi: Thank you everyone for joining us. Yes.

Operator: I'll hand back to you.

Hassan Badrawi: No, I just wanted to thank everyone for participating in the call, and looking forward to our next call.

Operator: Thank you. This now concludes today's call. Thank you all for joining. You may now disconnect your lines.