Yes. Thank you, and good afternoon, and good morning to our audience in the U.S.

Thank you for joining the OCI N.V. Second Quarter and First Half 2020 Conference Call.

With me today are Ahmed El-Hoshy, as of the first of this month our new Chief Executive Officer who is transitioning from his previous roles as Chief Operating Officer and Hassan Badrawi, our Chief Financial Officer. As you’ve seen, we’ve published our results this morning and on this call, we will review OCI's key operational events and financial highlights for the quarter, and then followed by a discussion of our outlook.

As usual, at the end of the call, we will host a question-and-answer session. Just as a reminder, statements made on today's call contain forward-looking information.

These statements are based on certain assumptions and involve certain risks and uncertainties, and therefore, I would like to refer you to our disclaimers about forward-looking statements. Now let me hand over to Ahmed.

Thank you, Hans, and thank you all for joining us today. Let me start by introducing the recent management changes.

As you may have seen, Nassef Sawiris has become Executive Chairman. And in that role, he will be fully focused on the strategic direction of the company.

He'll be working closely with the rest of the executive team, namely Hassan Badrawi, our Chief Financial Officer; our incharge of M&A; who you all know well, and Maud de Vries, our Chief Legal and Compliance Officer as well as myself. We also, of course, have the benefit of the next layer of management that is very strong and dynamic across commercial, operational, sustainability, M&A and other functions who position us well to continue to drive value for OCI's stakeholders.

We believe there is an opportune moment for the management change. This year marks an important inflection point for the company as our portfolio is maturing, and we can now fully focus on our operational and commercial excellence to cement our position in the global industry further.

Of course, our portfolio optimization and M&A continue to be in our DNA, where we look for value creation and consolidation opportunities during periods of volatility in our markets with the goal of realizing the best potential for our global asset base. We continue to strengthen our leadership across the group, with, for example, the recent appointment of Bart Voet for the newly created position of V.P.

of manufacturing to run our global production platform. Bart will join in September, and was previously at Shell for 27 years, overseeing 10 manufacturing locations across EMEA and Asia, spanning 6 million tonnes of chemicals production, 1.5 million barrels a day of refining capacity with responsibility of over 17,000 staff and contractors.

Turning to the quarter. Safety is our top priority, and to that end, we are pleased that our safety performance continues to be best-in-class.

Our recordable incident rate was an rate was an excellent 0.11 for Q2 and the 12-month rolling average is 0.23 incidents per 200,000 man hours, a big improvement from 2019. This is one of the lowest in our global industry.

But even though these are excellent results when it comes to safety, any incident is one too many. We, therefore, continue to prioritize process safety and aim to reduce occupational safety incidents ultimately to zero for all our assets across the globe.

With COVID-19 prevalent for some time to come, we remain even more alert than ever. We've been fortunate to have had relatively few COVID-19 cases amongst our global staff and all those afflicted but thankfully recovered other than a few existing cases who've recently contracted the disease and where we are continuing to monitor.

Our goal is to keep all our employees, their families as well as those in the surrounding community safe. The pandemic has not had a direct impact on our operations, largely thanks to the vigilance of our employees across our platform.

And I'd like to thank all of our OCI team members for their dedication and resilience as well as being safe. As you have seen hurricane – as you've seen over the last few days, Hurricane Laura landed in the U.S.

Gulf Coast this morning. Our priority has been to ensure the safety of our employees, and their safe evacuation from the impacted region as Jefferson County, where both OCIB and Natgasoline are located order to mandatory evacuation.

Consistent with industry and the region and to ensure the safety of our staff and community, both plants were shut down yesterday ahead of the storms. We have taken many precautions across both sites as we shut them down to safeguard against the hurricane.

In the last couple of hours because this is happening live, well, we've gotten an update from the team in Beaumont for both OCI Beaumont as well as Natgasoline. We were lucky in that the storm did move a bit to the east from our site into Louisiana with a large focus around Big Charles.

And the wind speed did not reach the levels anticipated by the category for hurricane. We're still assessing how the site looks, but preliminary – very preliminary information that has come to us has suggested that everything remains intact.

Of course, we're going to do a thorough investigation over the next day with the aim of restarting facilities. We're starting right now in the next few hours by sending drones in to look at the different parts of the plant.

Next, I'll go on to our operational results. Despite the challenging COVID-19 circumstances and selling prices reaching trough cycles during the quarter, we delivered resilient results and deleveraged our balance sheet by $222 million so far this year as we sold record owned production volumes during the second quarter and first half of 2020.

Our volumes increased 6% during the quarter from an already strong Q2 of 2019 and increased 26% from the first half of 2020 year-over-year. Our nitrogen portfolio was the main driver of the growth.

We achieved record CAN volumes in Europe in Q2 despite the pandemic and drought conditions on the farming side, taking it's pool increase in H1 to a healthy 16% compared to the same period last year. UAN volumes in the U.S.

were also higher, reflecting, on the one hand, IFCO stabilization and debottlenecking and production following last year's turnaround, and debottlenecking and also our strengthening competitive position in the Midwest via our N7 joint venture. Our production, commercial and supply teams did an excellent job establishing these volumes under such circumstances.

We also had the contribution from Fertil and Abu Dhabi, which has been consolidated since Q4 2019. On a like-for-like basis, our first half nitrogen volumes increased by 10% during the first half.

This was partially offset by lower ammonia volumes at Fertiglobe largely at – driven by electrical power issues in Q2 that has since been resolved with new high-voltage industrial mines attaching to the site they're put in place in July. Our methanol production was not at run rate yet during the quarter, and total own-produced methanol volumes decreased 11%.

However, we've made substantial progress. Following the extensive turnaround that we finalized in February, Beaumont methanol plant was running at high levels on average in Q2, resulting in a good improvement in EBITDA for the U.S.

Methanol segment from the first and the second quarter, despite a big drop in selling prices. We also finalized the turnaround at our methanol facility in the Netherlands in June, which was the reason for a relatively low EBITDA contribution from BioMCN.

But the two plants – the two lines and BioMCN have been achieving average utilization rates in the 90% to 95% range since restarting, despite the heat wave in the Netherlands and over 95% in the past several weeks. In addition, from a volume perspective, Natgasoline had some equipment issues that occurred during April, which we addressed successfully.

But since the restart in early May, the plant has been able to operate reliably until our safety led shutdown yesterday, and obviously, as I just mentioned, we're in the process of looking to restart. With that, I'd like to turn it over to Hassan to discuss the financial results.

Thank you, Ahmed. I'll cover some of the – some more details on our results, starting with the income statement.

As Ahmed described, during the second quarter, we achieved resilient results and healthy volume increases. Despite these record sales volumes, however, our revenue decreased by 8% to $875 million in the second quarter as compared to the same quarter last year, which was due to selling prices reaching trough levels across all our products.

Our adjusted EBITDA was 20% lower at $220 million in the second quarter as compared to the second quarter last year, again as a result of the lower prices, but also a lower result at Natgasoline as mentioned. Our reported EBITDA, excluding the effect from Natgasoline was at the same level in Q2 2020 as in Q2 2019 as we include our share of Natgasoline in the adjusted numbers.

We estimate this negative impact on our EBITDA from prices to have been circa $120 million if you compare Q2 2019 with Q2 2020. And this is despite the benefit of approximately $50 million from lower gas costs during the quarter of this year as compared to last year.

And when we look on a half year basis, which captures a full season for fertilizers, both our adjusted and reported EBITDA up by 2% and 16% respectively. In terms of segment contribution, the EBITDA for the nitrogen business was overall lower during the quarter.

This was despite healthy demand in our agricultural markets, and despite COVID circumstances, which more than offset weaker volumes in the industrial markets. It should be noted that our European business did well and reported a higher EBITDA as we capture the full effect of the lower gas prices during the quarter.

We also benefited from healthy demand for our products in Europe. And as a result, reduced inventories meaningfully during the second quarter, which obviously had a noticeable effect on our working capital.

The same holds for our U.S. business, where we recorded higher volumes compared to an already very strong Q2 2019.

However, benefits from the gas prices were not enough to offset the weaker prices for UAN in particular. As Fertiglobe, we had a boost from the inclusion of Fertil in our consolidated results, but overall results were also significantly affected by pricing environments.

Ammonia volumes were lower. But that did not have a meaningful impact given the consistently low ammonia prices so far.

The methanol group adjusted EBITDA was lower in Q2 2020 due to a sharp drop in methanol prices, Ahmed mentioned earlier, as well as lower production volumes at Natgasoline and the turnaround activities in the Netherlands. On a reported basis, however, we saw an improvement in Q2 2020 compared to both the second quarter of 2019 and the first quarter in 2020, with Beaumont and the Netherlands both reporting better results.

Worth noting that our 50% share of a further insurance payment of $10 million as compensation for business interruption losses and damages incurred in the past few months is also included in Natgasoline's EBITDA number for the second quarter. Turning to the balance sheet and cash flow.

Free cash flow before growth CapEx during the quarter was $191 million. This reflects our operational performance for the quarter, as well as the reversal of working capital from the high seasonal levels seen in the first quarter, culminating a healthy free cash flow conversion.

Total cash capital expenditures reached $68 million again during the second quarter of 2020, of which, maintenance CapEx was approximately $52 million. We spent the balance of $60 million on various growth CapEx initiatives.

In the first half, CapEx amounted to a total of $164 million, but – and this is more than half of what we expect for the full year as the turnaround schedule for the second half is lower. Also note that our interest payments are semiannual and always higher in the second and fourth quarters based on our current debt structures.

As a result of our free cash flow generated and notwithstanding extraordinary circumstances resulting from the pandemic, we were able to further deleverage our balance sheet during the quarter. Net debt, as you have seen, decreased by $128 million from a figure of $3.97 billion at 31st of March 2020 to the reported $3.84 billion as at 30th of June 2020, resulting – implying a total deleveraging of $222 million year-to-date.

At this point, I'd also like to add that we – and reiterate that our priority remains to optimize free cash flow generation, and we remain committed to our financial policy to deleverage our balance sheet. Although, obviously, that is logically impacted by the – in terms of timing and how fast we can achieve this through movement to selling prices.

We have also mentioned in previous calls that we continue to evaluate our capital structure to identify further cost-effective refinancing opportunities with a view to simplify structures, further simplify our structures and target savings. We're very pleased with the $385 million refinancing package at Fertiglobe, for which final terms have been negotiated with lenders.

This debut financing referred to global resets the capital structure in centralize some of the Opco debt within Fertiglobe at the Fertiglobe holding level. The facility is meaningfully oversubscribed and attracted strong interest from an array of leading region of international banks.

The newly negotiated facility has an interest rate, which is 175 bps lower than the existing debts or translating to approximately $9 million in annual run rate savings on the interest expense line. We believe the success of this refinancing reflects the leading competitive position of Fertiglobe as a – and its healthy balance sheets stemming from this position as a global export.

With that I’ll hand – I'd like to hand over back to Ahmed for our outlook and some concluding remarks before we move on to Q&A. Ahmed?

Yes. Thank you.

Thank you, Hassan. So Hassan said, I'd like to conclude with an outlook for our business, which despite all the challenges around us looking much more positive than only a few months ago.

I also believe that OCI's asset-based commercial capabilities and financial standing are well positioned to maintain any near-term volatility, if that were to happen. If I start with the nitrogen markets; we believe that the global nitrogen markets are looking positive for the rest of the year and into 2021.

The main driver is healthy demand in several importing countries as farm economics are healthy. We are seeing robust demand from India and Brazil in particular, but also other countries in South Asia, Latin America, East Africa, as well as Australia.

This benefits our export platform, Fertiglobe, in particular, where we benefit from our strategically placed distribution network and healthy netbacks. The outlook for our core U.S.

Midwest market has also strengthened recently and market sentiment has improved. We are anticipating a favorable fall application in the U.S.

for the ammonia markets, given the rapid pace of planting this spring, and the maturity of the current crops allowing for a potential extended application window after harvesting and before the winter. Corn prices have moved up recently and futures suggest further upside, which is positive for nitrogen markets and pricing versus levels seen earlier this summer.

On the one hand, there's been a strong pull from China where a combination of drought and the recovery in demand has resulted in significant increases in corn purchases. And on other hand, a recent – the ratio storm in the Midwest has destroyed part of the corn crop in our core area: Iowa Indiana areas.

It is too early to state what the financial impact will be or the final impact will be, and it's being assessed, but it is likely to result in less harvesting, less supply and more reliance on government and insurance programs Ando Insurance programs to support the farmers. In Europe, our order book is looking healthy, and we expect nitrate prices to be supported by healthy demand and quite some room to catch up with the recent increases in the earlier prices.

Industrial markets have been weak in Q3 2020 as a result of the slowdown in economic activity, which has resulted in ammonia prices, in particular, lagging the recent rebound in ammonia prices. However, we've started to see a recovery in demand in our industrial end markets, which should benefit ammonia and in some of our other industrial products such as melamine.

Furthermore, the fuel ethanol market in the U.S. is also recovering from trough conditions, which is obviously favorable for end markets associated with agricultural as well as transportation.

Lastly, and quite important, the demand for diesel exhaust fluid, the DEF in the United States, has increased significantly recently with the rebound of over-the-road traffic. We saw a very strong recovery for DEF out of biofertilizer with record volumes in July and sales in August at a pace that suggests that it will even be better.

We've already been able to increase prices, which bodes well for the 2021 season contracted increasing level. Moving to the methanol market.

The outlook for our methanol end markets is also strengthening. There can be some volatility going forward, depending on how the pandemic develops, but spot methanol prices have rebounded already more than 50% since reaching a bottom – below to – $140 per ton of spot price in June.

In our main U.S. and European markets, we've seen month-to-month improvements in demand from the lows reached in the spring.

And going forward, we see support from several factors. First, methanol to olefin economics versus naphtha crackers are helping – resulting in high rising utilization of two plants in China, which has been a key driver of a rebound in methanol demand.

The outlook for downstream demand has also improved with fuel consumption picking up following the ease of lockdowns across the globe and a gradual return of global and industrial construction activities and driving increased demand for derivatives such as from alcohol in acetic acid. The idling is a high cost methanol production capacity also helps tighten supply and demand balances in 2020 and has supported price recovery.

So all in all, we feel good about the improving outlook for both the nitrogen and methanol businesses, and we believe that given our low-cost position that OCI is well positioned to benefit disproportionately vis-a-vis peers in the environment of improved selling prices. In the meantime, we focus on operational and commercial excellence, volume growth, synergies at Fertiglobe as well as the optimization of our capital structure, all with the goal of generating free cash flow and lowering our net debt.

I'd like to just finish with some remarks about the wider environmental impact – about higher environmental impact on sustainability as a top priority for the company and our strategy. As a global leader in our industries and our communities, we are committed to investing in products that help feed the world and provide greener fuel solutions, including, for example, biomethanol based on waste gas.

Products such as ammonia and methanol has significant potential and stand to benefit from an increased sustainability focus of clean fuels, stores of energy – clean burning fuels and the stores of energy with storage and transportation infrastructure in place globally already. We are dedicating a significant amount of time in manpower to identify, evaluate and develop sustainability initiatives that reduce our environmental impact, grow our green portfolio and innovate more effective ways of reaching the world's carbon neutral goals.

Importantly, we are also working on improving our reporting and transparency and our expanding performance management of non-financial parameters. Furthermore, you will have seen today that we also announced the nomination of Heike van de Kerkhof as a non-executive director and who will have a specific focus on sustainability, diversity and inclusion with – and inclusion within our Board and in our Board of Directors.

In addition to her extensive insights and background in the chemicals and industrial space. With that, we'll open the line for questions.

Operator?

Yes, please.

Yes. Thank you.

Good afternoon, Ahmed, Hassan and Hans. I have a couple of questions.

I'll ask them one by one, if I may. Ahmed, thanks already for providing some news on the impact of Hurricane Laura and let's hope all your employees and their families are safe as well.

First question. Can you share with us any update on the planned methanol disposal?

Sure. So with regards to the planned methanol disposal, we don't have an update from what we shared in the last quarterly conference call other than that we have postponed it until the first half of next year.

So we remain to be – we remain to come back to the market with an update in the beginning of the year next year.

Okay. Thanks.

With reference to this, thanks for your sentiment on Hurricane Laura. So far, from an employee perspective, everybody is accounted for, there have been some – there's been people without power, but we're still collecting information.

So we're thankful and hopeful that we'll not get any negative news.

Okay. Thanks.

Then my second question, please. Can you please run us through the scheduled maintenance shutdowns in all of your major locations for this quarter and perhaps also for H2 overall?

Thank you.

For this quarter being Q2?

Q3 and Q4.

Yes. So as Hassan mentioned, I mean, with regards to the amount CapEx spend we had in the first half of this year, this should be a lower intensity second half of the year.

We did mention in the press release an OCI nitrogen turnaround as well as the inspection stock, a small inspection stuff we had to do over the course of the second half of this year for – it's really for one ammonia line and one of our nitric acid plus fertilizer lines. Otherwise, we don't provide guidance with respect to specific shutdowns, but I can say that it should be materially lighter than the first half of the year as well as last year.

Okay. Great.

Thanks. And final question, please.

How do you see free cash flow evolving in the second half of this year? Thanks.

Sure. Hassan, would you like to take this one?

Yes. Sure.

I mean, as you know, we've – we focus our guidance on CapEx and our expectation for interest. And we – we refer to you on your modeling views on commodity prices.

What I can tell you is that on an annual basis, and I think I've used this as 50[ph] before, I apologize to repeat it, but I think it's a good indication. On an annual basis, if you apply a $25 per ton average increase in our portfolio of commodities, that alone results on an annual $330 million EBITDA improvement.

This would give you the sense of – the sheer size of impact of pricing movements. We are obviously focused on achieving our operational and volume targets.

This year has been a meaningful step up, as you saw already in the first half. And given the lower intensity CapEx schedule, we should continue to see good volumes in the second half; at least this is what we are aspiring for.

And it becomes really about how prices continue to move as we come out from these trough levels. As a business, we have demonstrated resiliently.

We'd like to think that even in such extreme circumstances where we saw oil prices hit trough levels, we were still able to generate free cash flow, deleverage and continue on our path.

Okay. Great.

Thanks, Hassan. Just to clarify, USD 25, was at least to $330 million EBITDA sensitivity, right?

Yes.

Great. Thank you very much, gentlemen.

Thank you.

Hi. Good afternoon.

I’ve met Hassan and Hans. Three, small questions, I mean first on the nitrogen outlook, you provided some detail, you provided on the demand side, and you touched on China in – for exports for the remainder of the year.

But could you tell us a little bit more about how do you think about how the supply side will develop over the sort of next the next 12 to 18 months, specifically with new suppliers coming on stream from Iran, possibly India and as well as some brownfield in Russia? That's the first question.

Thank you.

Sure. So with regards to the supply side, it's obviously something we focused on, and from what we see for the next six to 12 months, there has been delays, not only on the urea production side but also on the new methanol side for additional capacity coming online.

A lot of things were slated to come online in the middle of this year, then got deferred to later this year into next year. So with the continued increases in demand that we've seen, particularly on the urea side, if that's the urea you're asking about, we think that it should be able to be absorbed by the additional demand that we're going to continue to have out of the South Asian, Latin American and U.S.

and European markets. The Indian additional production, we understand there's still we're still on the high side of the cost curve.

And to the extent you have some – you have some increases in the LNG pricing environment, which we started to see, there'll continue to be on the high end, it may not run at full rate. As well as on the Chinese side, some of the natural gas space and coal-based production continues to be marginal when you think about the average price that we saw, for example, in Q2 and Q3.

Sure. Thank you very much.

And second question is on the methanol side. I know, I'm aware that a meaningful amount of your vessel volumes are typically contracted.

But I wonder if you could provide some color on what you're seeing on the methanol demand side, specifically in Europe and U.S.? And I'm particularly looking for what you're seeing in July and August versus the second quarter, is demand picking up on the industrial side?

Yes. Absolutely.

So I think basically, with Christian's question and the previous question about free cash flow outlook from the first half moving into the second half of this year, one of the things that was quite important to keep in mind is that the results that we're presenting today reflect a pretty poor performance from our methanol production side overall. We had a very large turnaround in Europe that had a lot of the production after the quarter as well as sizable downtime in Natgasoline in April.

So given that we're on an improved volume outlook from a production perspective, we know we do feel like we can achieve a lot more in the best part of our business. With regards to the demand that we've been monitoring since March when COVID started to hit, we did see some reductions in nominations in May and June from some of our customers in U.S.

and Europe. But we started, as you said, as you mentioned, to see that come back.

So say, versus our contracted amounts and nomination, we don't see any shortfalls at this point for the August and September time frame. So we've seen a good recovery.

Some parts of the industrial markets are still kind of ramping back up. But from our customer base, speaking for OCI itself, we feel pretty good about the demand.

Thank you very much. And then just a household keeping question, if you like.

I mean, just could you provide any sort of guidance on CapEx in the second half? And how should we think about maintenance – abnormal maintenance CapEx?

And maybe any growth CapEx we should account for? Thank you.

Sure. Hassan, maybe you start with this one, and I'll jump in.

Yes. I mean, as we mentioned, I think in previous calls, our CapEx guidance for this year was meaningfully lower than last year, there has been – the first half certainly has higher intensity.

So a larger share of the year has been already expensed in the first half of 2020. We expect that number to be lower for the second half.

There is some impact from the inspections in Holland, which Ahmed can comment about a little bit, which may have slight impacts on the CapEx number that you were expecting for the year, which was circa, I believe, we had mentioned up to $260 million of CapEx might move a little bit but not by much. And as a business overall, as we hit our sort of mature run rate and our – and we come out of this significant methanol repair program that we have undergone and Natgasoline, which has successfully demonstrated some stability until the safety led shutdown.

I think overall, we're starting to – we're hoping to start getting to a more sort of run rate phase with very limited growth, except on very interesting bolt-on high-return growth projects. And similarly, green initiatives that we're evaluating in due course that have a more long-term nature.

Ahmed, anything to add?

Yes. That's exactly right.

And I think that what Hassan was mentioning is what we had in our press release and what I mentioned earlier, which is OCI nitrogen was scheduled for a turnaround at the end of this year. And these inspection stops and we took the opportunity to undertake some activities during these inspection stops here in Q3.

That resulted in some of the CapEx that would have been booked in 2021, potentially getting booked in 2020. So that could lead to some of that nominal variance versus our guidance from a few months ago.

Very helpful, and thank you very much.

Hi, this is Faisal Al-Azmeh from Goldman Sachs. And thanks for the opportunity for asking questions.

Just a few questions on my end. Maybe starting off with, if you can shed some light on the situation in Egypt and the recent shutdown of the ammonia plant?

Do you see any potential for the cost structure changing? We've been hearing kind of the likelihood of maybe revising or coming out with a new cost for natural gas there, that's something that some of the companies have been kind of highlighting.

Is that something that you think could happen? And then if so, how does it also impact the domestic sales of fertilizers in Egypt and the pricing that you actually sold domestically?

And then secondly, maybe on nitrogen and fertilizers, and when thinking about the pricing strength that you've kind of mentioned just now. We've seen this strength is kind of winding down a bit.

If you can kind of share a bit of view on trading flows recently? And then what has caused that strength to fade out?

And then thirdly, just on the synergies with ADNOC, if you can shed some insight on the numbers achieved so far this year? And whether you've identified further potential for next year?

Thank you.

Sure. I'll take the first two and then Hassan, perhaps you can give an update on the synergies from Fertiglobe.

So good speaking to you Faisal. So with regard to the first question, on the Egypt side, obviously, our gas price is at $4 an MMBtu, which is for the production of ammonia, it ends up at these trough ammonia levels we saw a few months ago, resulting in pretty low margins on this ammonia portion.

We still make sizable margins, obviously, on the urea side. With regards to the gas price review, we understand that, that's something that's being undertaken right now and reviewed by the government for a number of sectors, one of which is fertilizer to ensure competiveness with global industry.

So I can't shed light on where that stands, but that's something that we understand to be under review. Kind of leave it at that.

With regards to what that means for domestic sales, we've seen a move towards liberalization of the domestic sales market for urea, which means that the government is going to be allowing more international pricing into the domestic markets rather than the lower domestic prices. So that should also bode well for regional or actually Egyptian fertilizer producers.

So that's something we are monitoring and focusing on across our network. Obviously, otherwise, Fertiglobe does have further advantaged gas in the non-Egyptian plants straight line.

The second question – sorry, good do you have a follow-up Faisal?

No, I don't have a follow-up.

The second question. Yes, the second question was with regards to trade flows and the runoff that we've seen on the pricing side.

Yes. So over the last several months, I mean, if you recall in June, and obviously, that's reflected in the Q2 results that we had – May and June, we had very low pricing in NOLA in the U.S.

despite it being the spring season. And I think a bit of producer panic and consumer panic at the same time, very low liquidity.

People did not want to buy until they saw the demand right then and there. Even when you were on the cusp of being in season.

And so you had prices go to low 200s for urea that was just not sustainable. The low cash cost for a lot of production globally.

Since then, with the turndowns of supply that we saw at marginal cost producers, the fact that logistics prevail, logistics costs are something that doesn't go away when prices are lower, and the sizable demand increases out of India as well as Brazil, we've seen this big recovery where the Indians have continued to come back to the market and take additional supply culminating with the tender, whose results we've seen this week Indian's taking well over 1.5 million tons of urea. So that helped suck up a lot of the supply in the system over the last several months.

And as the Indian season comes to a close before coming back to [indiscernible] later this year, in late October and November, this is where Brazil starts to step in because it has two crops going in, in the Q4 and Q1 of this year. And the European and American buyers who've been waiting as well, they've seen this rally.

They've been waiting on the sideline, and you've seen that reflected in the pricing in the U.S. and Europe.

So we expect and we're starting to see kind of some green shoots with the Europeans coming back to work post-August here and starting to look at the demand for later in the year and next year. And on the U.S.

side, starting to look towards positioning products, we'll call it, two to three months out from now to start building domestic supplies in the U.S. because the U.S., as you know, still needs to import something like 4 million to 4.5 million tons of urea before the spring next year.

So there's some catch-up that still needs to be done where that low liquidity in the U.S. and European markets should start to dissipate and start seeing some more transaction.

Hassan, do you want to discuss the synergies?

Sure. Yes, on the synergies, that's obviously a reflection of the integration plan that we've – that has been really quite successful since the consolidation of Fertil into our business, we have not given any specific progress report on a quarterly basis, but we have stated, I believe, in the past, that we were targeting north of $60 million of commercial and technical synergies as based on the prevailing prices, selling price at that time.

Note that since then, we had also added to that target $20 million of technical cash savings that don't necessarily appear in the EBITDA line because of the extremely successful technical integration work, as you know, we have almost three identical – technologically identical plans, which gives us a lot of possibilities. And we continue to work on what other value we can extract from this very interesting combination.

You have read you saw on the commercial side, the name Fertiglobe appeared increasingly so as a brand, and we have been able to participate intensely in large tenders that we were never really present in before. We used to go through – we had to participate in the pass-through traders and through middle entities, now we have appeared in size with the ability to supply from multiple sources and has been quite commercially beneficial for us without getting into too much detail.

And lastly, I mean, with the – another feature of the synergies, of course, has been the recently successfully negotiated refinancing of our debt in Fertiglobe – part of our debt in Fertiglobe, as we continue to hold, obviously, the Algerian dinar debt in Algeria at the Sorfert level. But the rebalance of the debt has been centralized at the Abu Dhabi Holdco entity.

And we have been able to achieve significant flexibility, good tender, and most importantly, a meaningful reduction in our interest rates. I think this is directionally reflective of the state of our business, the stabilities we're achieving and Fertiglobe's sort of thesis as a global exporter and the synergies we've been able to extract.

And we hope we can continue to find similar optimization opportunities across our group, especially in very – in the backdrop of very strong capital markets on the debt side.

Thanks. Maybe just a quick follow-up on the last point.

When looking at the GCC or Egypt or even North Africa, are you looking – could you expand that to operations to include other players, maybe on the distribution side, where you can kind of widen the offering? Or do you think at this stage, you're just focusing on ADNOC?

And then maybe at some point, you would look for more consolidation within the market, not necessarily M&A, but just forming JVs of certain sorts? Thanks.

Ahmed, should I start?

I mean – yes, go ahead, and I'll jump in.

No, I was going to say. It's a good question.

Ahmed mentioned a very important word on the onset of the call that it isn't very much embedded in our DNA to think of value creation and optimization of our asset portfolio in many ways. Ahmed successfully led the creation of similar – of such joint ventures in the U.S.

on the trading side, which have been extremely important for our business there, and impactful, maybe not in visibly tangible ways, but we know it has been impactful and synergistic. We believe that such opportunities should arise and we would evaluate in other regions.

And we continue to look for ways to extract value from this very technologically advanced, young asset base that's been put together this past decade. Ahmed you want to add?

Yes. I mean, that's right.

I mean, like I said, we're looking at the ways that are done on agreement, cashless as well as potential M&A basis all the time. So the commercial team and the general management team at Fertiglobe has done a great job of actually being a distributor for some loan buyers, producers that are single plants or two plants that would like Fertiglobe to distribute their products.

I think lots of what mentioned on previous calls, the sizes of our export platform at Fertiglobe on run rate basis is larger than Chinese exports. So that has room to continue to grow regionally.

And we've gotten pretty good inbound inquiry as well as some successful one-off distribution opportunities with certain other producers. And we continue to evaluate those opportunities on a more systematic way.

Thank you.

Hi, guys. Good afternoon.

Two questions, I think Hassan, it was you that mentioned some of the industrial applications have seen some weakness. Is that across the board or are you seeing some sectors weaker than others?

I can take that one, Hassan, actually. I mean on – just from a commercial perspective, it definitely it varies, and it varies on location as well by location as well.

But we did see some weakness from some of our ammonia customers in Q2. For example, in Europe, they actually turned down production in Q2 and have since restarted.

As their downstream value chain whether they'd be in the textiles, automotive, plastics end markets, they've all started to pick back up. We've seen good demand out of our industrial customers in the U.S.

Gulf Coast and been fairly resilient for both ammonia as well as methanol. And our methanol consumer's actually in Europe as well.

Our specific customers have been quite resilient. Now there have been some areas where there have been pockets of weakness over the last several months.

But I'd say the general trend is to continue to see people reopen and try to build back stock after periods of weakness. Hello?

Hello.

Yes. Are you done asking your questions?

Yes, yes, but maybe it didn't come through. The other question I had was on the refinancing opportunities you might have to simplify the structure to reduce the interest burden.

Any comment on the bonds you have, which became callable, I guess, back in April?

Yes. Obviously, it's also a very valid question.

We – all I can say at this time is that we are obviously continuously to – we continuously monitor the markets. We're quite aware of the strong market conditions that prevail, and we will make a – our evaluation on – really on a – we consistently look, week in week out on whether there are any opportunities that we should be looking at.

But should something arise, obviously, we're going to be quite transparent about it.

Thank you very much.

And I add to that, of course, as a company, we're – and something that was worth reiterating because despite the tough conditions we've seen in commodity prices, we had all our recent refinancing activity has given us quite a comfortable maturity profile going forward, averaging less than $160 million of repayments per year for the next three years. And our liquidity position continues to be quite robust with $1.5 billion of available liquidity, a $900 million of undrawn committed facilities, of which, nearly $700 million of that is sitting at the N.V.

Holdco level. So that's, again, quite a comfortable position, and that gives us the luxury of making the – making any further optimization decisions in a sort of a calm and calculating manner.

Fine. Thank you.

Hello. Hi, thanks.

A couple of questions. Just first one, at this point, looking, it's almost end of August.

And given the different moving parts. Can you help us understand how do you see overall Q3 in terms of earnings directionally versus, say, the second quarter, should we expect material change or significant change either way versus second quarter?

That would be just the first question. And second one was just a clarification in a way.

There is a big deferred tax liability balance on the balance sheet. Is there any cash element to it in the future at all?

Or is it something got through which is accounting, which may not have any cash implications in the future? Thank you.

Yes. Hassan, do you want to take the tax question first, and then I'll jump in on the Q3?

Sorry. I was on mute.

No, there is no cash aspect to that. I think as a company, we have – we've continued to deliver on a pretty low cash tax rate, which is reflective of a combination of factors, whether it's the fact that some of our businesses have benefit from accelerated depreciation, including our U.S.

assets, for example, which actually also protect us from any further weather because of the carryforward losses and combination activity, depreciation. So whatever happens in the U.S.

in terms of the political landscape, we're pretty much a little bit indifferent there. Also a combination of the fact that our businesses such as Algeria are not subject to tax because all petrochemical exports of Algeria are not taxable.

And of course, we have fiscal unities Unity in our European business, which also allows us to manage our tax book. So overall, we've maintained pretty effective cash tax, and we are forecasting that, that will continue at least for the next several years.

Thanks. Hassan.

And Chetan, can you remind me, you said that you wanted to get some guidance on how Q3 was looking versus Q2?

Yes. Just directionally, if we don't want – of course, there's no specific guidance, but just directionally, should we expect any major change either way.

Just wanted to see in terms of direct gains?

Yes, we don't – just given the commodity nature of our business, we don't like to give specific guidance and where there's directionally or otherwise with regards to how the quarter performs. But we'll say that we've seen a good volume of production, and we've seen a recovery in prices across the board, particularly urea here in Q3.

The European contract price for methanol, for example, we should see that step-up in Q4 because the spot price is covered quite meaningfully. So I'll leave it at that.

But yes, I mean, typically, Q3 is a lower quarter for fertilizer companies in general. And Q2 tends to be a little bit stronger, but we've seen a good recovery here in Q3 as expected on the urea side and on the methanol and ammonia side.

Thank you.

I mean the one thing I could add to Ahmed is that obviously, you recall also last year, our Q3 last year was specifically quite intense in terms of in terms of turnaround activities. So that is the backdrop we leave you with.

Understood.

Yes. It's a good point, Hassan.

Any further questions?

Okay. Thank you very much – thank you, everyone, for joining this call.

Please stay safe and look forward to our next quarterly update.

Thank you.