Breaking Down Methanex Corporation (MEOH) Financial Health: Key Insights for Investors

You're looking at the latest Q3 2025 earnings from the global methanol giant and you're seeing a headline net loss of $7 million, a sharp reversal from the $64 million net income they posted just last quarter, and that's a tough pill to swallow. This is a classic case of volume versus price, honestly, because while production soared to 2,212,000 tonnes-a huge boost from new acquisitions-the average realized price dropped to $345 per tonne. Here's the quick math: the operational scale-up is working, but the market is applying serious pressure. Still, you have to look deeper at the cash flow, and that's where the strength lies; the company generated $184 million in cash from operations and immediately used $125 million to pay down Term Loan A debt. That's a strong move. The market's pricing pressure is defintely a near-term risk, but we need to see if this operational efficiency can still deliver on the consensus full-year earnings per share (EPS) estimate of $4.32 per share.

Revenue Analysis

You need to know where Methanex Corporation (MEOH) is making its money right now, and the short answer is: it's all about methanol, but the volume mix is shifting, and total revenue is down slightly year-over-year. For the trailing twelve months (TTM) ended September 30, 2025, the company reported a total revenue of approximately $3.57 billion. That figure represents a modest but notable year-over-year decline of about -3.36%, which is a key signal of the pressure from a lower average realized price in the market.

The core revenue stream is, defintely, the sale of methanol, a foundational chemical used in everything from formaldehyde to olefins (a key component in plastics). What's crucial is the breakdown between methanol the company produces and the methanol it trades (purchased product). The third quarter of 2025 showed a significant increase in total sales volume, largely driven by the successful integration of the newly acquired Beaumont and Natgasoline facilities.

Here's the quick math on the volume split for Q3 2025, showing how much of the sales volume came from their own plants versus what they bought and resold, which is a key part of their supply chain strategy:

• Total Methanol Sales Volume (Q3 2025): 2,476,000 tonnes
• Methanex-Produced Methanol Sales Volume (Q3 2025): 1,891,000 tonnes
• Purchased Methanol Sales Volume (Q3 2025): 585,000 tonnes (2,476,000 minus 1,891,000)

The total sales volume was up, but the average realized price per tonne dropped to $345 in Q3 2025, down from $374 in Q2 2025. That's a real headwind, and it explains the revenue dip despite higher volumes.

A significant change in the revenue profile this year is the addition of ammonia production following the OCI Global acquisition. While methanol remains the primary product, the Beaumont facility produced 88,000 tonnes of ammonia in Q3 2025. This diversification is a small but important new segment to monitor as it offers a hedge against pure methanol price volatility. To dive deeper into the financial mechanics of this shift, you can read the full post: Breaking Down Methanex Corporation (MEOH) Financial Health: Key Insights for Investors.

The following table summarizes the key revenue and volume figures from the most recent quarter, which gives you a clear picture of the near-term operational performance:

The big takeaway is that volume is up, thanks to the new assets, but price compression is offsetting that gain, resulting in the negative year-over-year revenue growth. This is a commodity business, so price matters.

Profitability Metrics

You're looking at Methanex Corporation (MEOH) because you want to know if their profitability is a flash in the pan or a sustainable advantage. The direct takeaway is this: Methanex's margins are significantly outperforming the broader Chemicals sector in 2025, but you need to watch their long-term cost control, especially with the new acquisition integration.

Based on the trailing twelve months (TTM) data ending September 2025, Methanex is demonstrating strong core profitability. Their Gross Profit Margin stands at a robust 29.16%, translating a TTM Gross Profit of approximately $1,041 million. This impressive figure is what's left after subtracting the direct costs of making the methanol, and it's where the company truly shines.

Moving down the income statement, the Operating Profit Margin is 17.10%, with TTM Operating Income at about $610.46 million. This shows solid control over selling, general, and administrative (SG&A) expenses. Finally, the Net Profit Margin, which is the bottom line, is a healthy 5.99%, resulting in TTM Net Income of roughly $213.71 million. That's a good return for a commodity producer.

Outperforming the Industry

The real story here is how Methanex stacks up against the competition. The Chemicals industry as a whole is facing a challenging 2025, marked by overcapacity and soft demand, which has hammered margins across the board.

Here's the quick math on how Methanex's TTM performance compares to the Chemicals industry averages as of November 2025:

Honestly, a Net Profit Margin of nearly 6% while the industry average is in the red at -5.5% is defintely a statement. This suggests Methanex's strategic positioning-like its access to stable, economic natural gas feedstock in North America-is providing a significant structural cost advantage that peers lack.

Operational Efficiency and Margin Trends

While the current numbers are strong, you have to be a trend-aware realist. The company's gross margin has been in a long-term decline, averaging an annual decrease of 5.9%, which highlights a persistent need for enhanced cost management. That long-term pressure is the risk you need to map.

Still, the near-term trend is positive: Methanex's net margin of approximately 6% is an improvement over the prior year's 4.1%. Plus, the company's earnings growth over the last year was a staggering 40.2%, completely blowing past the Chemicals industry's earnings decline of -2.6%. This is a company gaining market share and efficiency in a tough environment.

Management is clearly focused on operational efficiency, especially after the acquisition of OCI Global's international methanol business. They are targeting $30 million in synergies over the next 18 months by integrating these new assets. This is a clear action to counteract the long-term margin pressure. You should track their progress on this synergy goal closely.

• Watch for gas price volatility, a key input cost.
• Monitor the integration of the OCI acquisition for cost savings.
• Review their commitment to reliable and cost-efficient operations.

For a deeper dive into their long-term strategy, you can review the Mission Statement, Vision, & Core Values of Methanex Corporation (MEOH).

Debt vs. Equity Structure

You're looking at Methanex Corporation (MEOH) and wondering how they pay for their massive global operations-is it mostly debt or shareholder money? The short answer is they use a significant, but manageable, amount of debt, especially after their recent acquisition activity. Your key takeaway is that their leverage is higher than the industry average, but their cash flow is currently covering the interest payments.

As of the third quarter of 2025, Methanex Corporation's total debt is substantial, sitting around $2.83 billion, which is mostly long-term in nature. While we don't have the exact short-term debt figure alone, their total short-term liabilities-which includes the debt coming due-is approximately $722.5 million. This is a capital-intensive business, so they defintely need that long-term financing to fund their global production network and recent expansion.

The core health metric here is the debt-to-equity (D/E) ratio, which tells you how much debt they have for every dollar of shareholder equity. Methanex Corporation's D/E ratio recently stood at about 1.43, meaning they have $1.43 in debt for every dollar of equity. Here's the quick math: that ratio is significantly higher than the Specialty Chemicals industry average, which is closer to 0.6457. This higher ratio suggests a reliance on debt financing, but it's a strategic choice tied to their growth.

The company has been actively managing this leverage. In Q3 2025 alone, Methanex Corporation generated $184 million in cash from operations and used a portion of that to repay $125 million of their Term Loan A. Also, remember the major acquisition of OCI's international methanol business? To help fund that, their subsidiary launched an offering for $500 million in senior unsecured notes in late 2024. That's a clear example of using debt to fuel large-scale, transformative growth.

The market views this structure as non-investment grade, with S&P Global affirming a 'BB' long-term credit rating for the company in late 2024. Methanex Corporation balances this debt-heavy approach by maintaining strong liquidity-their current ratio is 2.13-and by prioritizing cash generation to service the debt. They're using debt to build scale and capacity, and then using operating cash flow to de-lever, which is a common cycle for a growth-focused commodity producer.

If you want to dig into who is buying their stock and why they are comfortable with this level of leverage, you can check out Exploring Methanex Corporation (MEOH) Investor Profile: Who's Buying and Why?

• Total Debt (June 2025): ~$3.75 Billion
• Q3 2025 Debt-to-Equity Ratio: 1.43
• Specialty Chemicals Industry Average D/E: ~0.65
• Q3 2025 Debt Repayment: $125 Million (Term Loan A)

Liquidity and Solvency

You need to know if Methanex Corporation (MEOH) has enough cash on hand to cover its near-term bills and fund its operations-that's the core of assessing liquidity. The direct takeaway is that Methanex's liquidity position is strong, backed by healthy ratios and substantial cash reserves, giving them flexibility for their capital-intensive business.

Assessing Liquidity Positions: Current and Quick Ratios

A look at the current and quick ratios tells us Methanex is in a solid, low-risk position on the balance sheet. The Current Ratio, which measures all current assets against current liabilities, stands at a robust 2.13 as of late 2025. This means for every dollar of short-term debt, Methanex has $2.13 in assets that can be converted to cash within a year. That's defintely a comfortable buffer.

More importantly, the Quick Ratio (or Acid-Test Ratio), which strips out inventory-a less liquid asset for a chemical producer-is still very strong at 1.43. A ratio above 1.0 is generally considered excellent, indicating the company can cover its immediate obligations without having to sell off its product inventory. This is a clear strength.

• Current Ratio: 2.13 (Strong short-term coverage).
• Quick Ratio: 1.43 (Immediate obligations easily met).
• Working Capital: Significant positive trend, supported by these ratios.

Cash Flow Statements Overview: Trend Mapping

The cash flow statement for 2025 shows a company that generates substantial cash from its core business, even with fluctuations in methanol prices. Cash Flow from Operating Activities (CFO) was strong in the first half of the year, though it showed a quarterly decline:

This quarter-over-quarter decline in CFO, from $315 million in Q1 to $184 million in Q3, is something to watch, but it's largely tied to a lower average realized methanol price, which dropped from $404 per tonne in Q1 to $345 per tonne in Q3. The underlying business is still a cash generator.

On the investing side, Cash Flow from Investing Activities (CFI) was a net use of cash, as you'd expect from a company in a growth/expansion phase. The Q2 period saw the closing of the OCI Global's international methanol business acquisition, a major strategic capital outlay. Cash Flow from Financing Activities (CFF) reflects a disciplined approach: in Q3 2025, the company used $125 million to repay a Term Loan A, plus paid regular dividends totaling $14.3 million. They are using operating cash to service debt and return capital.

Liquidity Strengths and Near-Term Risks

Methanex Corporation (MEOH) has significant liquidity strengths. They ended Q3 2025 with a cash balance of $413 million, plus immediate access to a $600 million revolving credit facility. That's over $1 billion in immediately available liquidity. Their working capital position is excellent, which means they aren't scrambling to pay suppliers or short-term debt.

What this estimate hides is the commodity price risk. The primary near-term risk is the continued volatility in methanol prices, which directly impacts the quarterly CFO trend. If prices drop further, the CFO could continue to compress, making debt reduction and shareholder returns more challenging. Still, the current ratio of 2.13 provides a great cushion. For a deeper dive into the market dynamics driving these numbers, you should check out Exploring Methanex Corporation (MEOH) Investor Profile: Who's Buying and Why?

Action: Monitor the Q4 2025 CFO for stabilization and watch the average realized methanol price; a rebound above $370/tonne would signal a reversal of the Q3 trend.

Valuation Analysis

You are asking if Methanex Corporation (MEOH) is overvalued or undervalued right now, and the short answer is that the market is treating it as a value play with a strong upside, especially when you look at the core valuation metrics. The analyst consensus is a clear Moderate Buy, with an average price target of $46.27, suggesting a significant potential increase from the current price of around $35.71 as of mid-November 2025.

The core of this valuation argument rests on the company's multiples, which look defintely attractive against the broader market and even its sector peers. Methanex's forward Price-to-Earnings (P/E) ratio sits at about 11.93, which is low and suggests the stock is inexpensive relative to its expected 2025 earnings. This is a strong signal.

Also, consider the Price-to-Book (P/B) and Enterprise Value-to-EBITDA (EV/EBITDA) ratios. The P/B ratio is currently 0.9582 as of November 2025, which is a classic indicator of potential undervaluation, as it means the stock is trading below its net asset value per share. Here's the quick math on the enterprise side: the EV/EBITDA is only 7.29. That's a healthy number, telling you the company's total value is reasonable compared to its operating cash flow before non-cash charges.

• Forward P/E Ratio: 11.93 (Suggests undervaluation relative to earnings).
• Price-to-Book (P/B) Ratio: 0.9582 (Trading below book value).
• EV/EBITDA Ratio: 7.29 (Healthy operating cash flow multiple).

Stock Performance and Dividends

The stock's journey over the last year has been volatile, which is typical for a commodity-linked chemical company. Methanex Corporation's stock price has decreased by 8.70% over the last 12 months, with the price ranging from a 52-week low of $25.46 to a high of $54.49. This wide range shows market uncertainty, but the current price is closer to the middle, leaving plenty of room for recovery if methanol prices stabilize.

The dividend picture is solid and sustainable. Methanex pays an annual dividend of $0.74 per share, which translates to a yield of about 2.01%. More importantly, the dividend payout ratio is a conservative 24.84% of earnings. This low ratio means the dividend is well-covered by earnings, giving management flexibility for capital expenditures or share buybacks, even during cyclical downturns.

Exploring Methanex Corporation (MEOH) Investor Profile: Who's Buying and Why?

Risk Factors

You're looking at Methanex Corporation (MEOH) and see a global leader, but you also need to see the potholes in the road. The company faces a classic commodity-chemical dilemma: managing price volatility and securing reliable, low-cost feedstock. Your direct takeaway is that while the OCI acquisition strengthens their North American footprint, the high leverage and operational risks in New Zealand and Egypt are immediate concerns.

The most significant external risk is the fluctuation in the global methanol price. For the third quarter of 2025, Methanex forecasts its average realized price per tonne to be between approximately $335 and $345 for July and August, a sharp drop from the 2025 first quarter's average realized price of $404 per tonne. This price pressure directly impacts profitability, even with a trailing twelve-month revenue of $3.7 billion as of mid-2025. One clean one-liner: Methanol price swings are the primary driver of earnings volatility.

Internally, the risk profile is mixed, as highlighted by two key financial health indicators. The company's Piotroski F-Score of 8 suggests a fundamentally sound financial position, but the Altman Z-Score of 1.51 (as of October 2025) places Methanex in the 'distress zone,' a warning sign of potential financial distress within two years. Here's the quick math on the balance sheet: the debt-to-equity ratio is relatively high at 1.43, reflecting a significant reliance on debt financing, with Methanex's share of total debt standing at approximately $3.8 billion as of September 30, 2025. This leverage is the main reason for the Z-Score warning.

• Commodity Price Risk: Methanol prices are volatile, impacting Q3 2025 forecast.
• Feedstock Risk: Gas supply curtailments in Egypt and New Zealand limit output.
• Financial Risk: High leverage and Z-Score of 1.51 signal distress.

Operational risks are concentrated around natural gas supply. Methanex's 2025 equity production is projected at approximately 8.0 million tonnes, but this output is consistently threatened by gas availability. For example, gas curtailments in Egypt are expected to continue, particularly during the summer months. In New Zealand, the run-rate production is constrained to about 400,000 tonnes due to the gas outlook. Plus, the recent acquisition of OCI's methanol assets, while strategic, introduces integration risk, though the company expects to achieve $30 million in synergies over the next 18 months.

To be fair, Methanex has clear mitigation strategies. Their top capital allocation priority is deleveraging, with a plan to direct all free cash flow to repaying the Term Loan A facility and targeting a debt reduction of $550 to $600 million over the next 18 months. They've also implemented a gas hedging strategy covering 50-70% of their needs for the first three years, which helps stabilize their cost of goods sold. Furthermore, about 35% of their production has gas costs linked directly to the Average Realized Price (ARP), which acts as a defintely effective natural hedge against falling methanol prices.

What this estimate hides is the geopolitical risk. Sanctions on Iranian methanol exports and the potential for new tariffs remain external threats that could disrupt global trade flows and impact regional pricing, especially in the Asia Pacific market. You can review the foundational principles guiding their response to these challenges in their Mission Statement, Vision, & Core Values of Methanex Corporation (MEOH).

Your action item: Finance should model the impact of a sustained $300/tonne methanol price on the deleveraging timeline by the end of the month.

Growth Opportunities

You're looking past the current volatility in methanol prices, and you're right to focus on the structural growth drivers for Methanex Corporation (MEOH). The direct takeaway is that the company has fundamentally changed its scale and cost profile through a major acquisition, positioning itself to capitalize on two significant, near-term market expansions.

The biggest lever for future growth is the successful integration of OCI Global's methanol business, which closed in 2025. This move cemented Methanex Corporation as the world's largest methanol producer, immediately boosting its global production network. The quick math suggests this deal will drive significant cost savings, with management targeting $30 million in annual synergies over the next 18 months alone. Plus, the new Louisiana-based Geismar 3 (G3) plant, which added 1.8 million tonnes per year to capacity, is now fully operational, meaning higher sales volumes are baked into the forecast.

Here's how the Street sees the financial trajectory for the 2025 fiscal year and beyond:

You can see the expected jump in earnings. That projected $5.00 EPS for 2026, which is a significant step up from the 2025 consensus of $4.32, is defintely a result of that increased scale and cost control kicking in. It's a commodity business, so volume and cost structure are everything.

The company's strategic focus is twofold: first, deleveraging, and second, capturing new demand. Methanex Corporation is directing all free cash flow toward debt reduction, with a target of repaying $550 million to $600 million of the Term Loan A facility over the next 18 months to shore up the balance sheet. This is a crucial, disciplined capital allocation move.

The second, and more exciting, growth driver is the emerging market for methanol as a marine fuel. Global methanol demand is already up, driven largely by China, but the marine sector is the real product innovation story. Methanex Corporation is actively exploring this market, and analysts project increased demand from the marine fuel sector by the end of 2025. This provides a new, less cyclical source of demand for their product.

Methanex Corporation's competitive advantage is simple: a low-cost structure and an integrated global supply chain. They are the world's largest producer, and their majority-owned Waterfront Shipping subsidiary, which manages 33 vessels, gives them unparalleled control over distribution. They also have a smart gas hedging strategy, covering 50-70% of their natural gas needs for the first three years, which locks in a low-cost feedstock advantage in a volatile market.

• Boost production with G3 and OCI assets.
• Capture new marine fuel demand.
• Lock in low-cost feedstock with hedging.

For a deeper dive into the company's Q3 2025 performance, including the reported $191 million in Adjusted EBITDA, check out Breaking Down Methanex Corporation (MEOH) Financial Health: Key Insights for Investors. Your next step should be to model the impact of the $30 million synergy target on the 2026 Free Cash Flow projection.