Methanex (MEOH) Clinches Gas Supply Agreement With ENAP

Methanex Corporation (NASDAQ:MEOH) and Empresa Nacional del Petroleo ("ENAP") have entered into a deal for the supply of additional gas for Methanex’s operations in Chile through Dec 31, 2019.

According to Methanex, the company is now fully committed to restart the Chile IV facility, which is targeted for the third-quarter 2018. It also remains optimistic that its underutilized 1.7 million ton Chile operations represents growth opportunity for the company at a very low capital cost due to the considerable progress in developing natural gas reserves in the area.

Shares of Methanex have moved up 26% in the past six months, outperforming the industry’s 13.2% growth.

Methanex recorded net profit (attributable to Methanex shareholders) of $32 million or 38 cents per share in third-quarter 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.

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.

Zacks Rank & Stocks to Consider

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

Some better-ranked stocks in the basic materials space are Westlake Chemical Corporation (NYSE:WLK) , Daqo New Energy Corp. (NYSE:DQ) and Kronos Worldwide Inc. (NYSE:KRO) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Westlake Chemical has an expected long-term earnings growth rate of 10.6%. Its shares have moved up 78.2% year to date.

Daqo New Energy has an expected long-term earnings growth rate of 7%. Its shares have surged a whopping 156% year to date.

Kronos Worldwide has an expected long-term earnings growth rate of 5%. Its shares have rallied 111% year to date.

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