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Methanex Delivers Significant Improvement In Income And Cash Generation

October 21, 2002

VANCOUVER, BRITISH COLUMBIA--Methanex Corporation recorded net income of US$58.5 million (US$0.47 per share) and generated EBITDA (earnings before interest, income taxes, depreciation and amortization) of US$108.0 million for the third quarter ended September 30, 2002. The third quarter 2002 results compare to net income of US$15.7 million (US$0.12 per share) and EBITDA of US$52.0 million for the second quarter 2002, and to a loss before the asset restructuring charge of US$13.7 million (US$0.08 per share) and EBITDA of US$20.0 million for the same period in 2001.

Pierre Choquette, President and CEO of Methanex commented, "The combination of continued favourable methanol supply/demand fundamentals, strong pricing and excellent Methanex plant operating performance allowed us to demonstrate our powerful cash generation capability in the third quarter. At US$182 per tonne, our average realized price for the third quarter was 32% higher than second quarter levels, and pricing strength is continuing into the fourth quarter. The European contract price for the fourth quarter was renewed at third quarter levels of EURO 208, or approximately US$202 per tonne (US$0.61 per gallon), before discounts. In addition, our non-discounted US reference price has remained at US$206 per tonne (US$0.62 per gallon) throughout the third quarter and into October, and US spot prices are currently in the range of US$210 per tonne (US$0.63 per gallon). Mr. Choquette added, "We operated our production facilities at 99% of capacity during the third quarter. Our ongoing focus on operating excellence combined with our low cost position and global presence leaves us confident in our ability to continue to deliver strong financial results."

Mr. Choquette noted, "Looking ahead, we are optimistic that the very favourable methanol supply/demand fundamentals that currently exist will continue. We are well positioned to generate significant cash flow throughout 2003 as only limited new capacity is expected to impact the market. Mr. Choquette added, "During the third quarter we commenced payment of a quarterly dividend of US$0.05 per share, a level that we believe can be sustained and built upon over time. This regular dividend is part of our ongoing commitment to return excess cash to our shareholders."

Mr. Choquette concluded, "We continue to enjoy excellent financial strength and flexibility. Cash on hand at the end of September 2002 was US$288 million, and we also have an undrawn US$291 million credit facility. We have the financial capacity to complete our capital maintenance spending program and pursue new opportunities to enhance our strategic position in methanol."

A conference call is scheduled for Tuesday, October 22 at 11:00 am EDT (8:00 am PDT) to review these third quarter results. To access the call, dial the Telus Conferencing operator ten minutes prior to the start of the call at (416) 883-0139, or toll free at (888) 458-1598. The security passcode for the call is 75577. A playback version of the conference call will be available until October 29th at (877) 653-0545. The reservation number for the playback version is 148070. There will be a simultaneous audio-only webcast of the conference call, which can be accessed from our website at www.methanex.com.

Methanex is a Vancouver based, publicly-traded company engaged in the worldwide production and marketing of methanol. Methanex shares are listed for trading on the Toronto Stock Exchange in Canada under the trading symbol "MX" and on the Nasdaq National Market in the United States under the trading symbol "MEOH."

Information in this news release and the attached management's discussion and analysis may contain forward-looking statements. By their nature, such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. They include world-wide economic conditions, the availability and cost of gas feedstock, the ability to implement business strategies and pursue business opportunities, conditions in the methanol and other industries including the supply and demand for methanol and the risks attendant with producing and marketing methanol and carrying out major capital expenditure projects. Please also refer to page 28 of our 2001 Annual Report for more information on forward-looking statements.

At September 30, 2002, the number of common shares outstanding was 124,573,192.

Management's Discussion and Analysis

Except where otherwise noted, all currency amounts are stated in United States dollars.

This third quarter, 2002 Management's Discussion and Analysis should be read in conjunction with the annual consolidated financial statements and the Management's Discussion and Analysis included in the 2001 Annual Report.

----------------------------------------------------------------------

($ millions, except
 where noted)                       2002                   2001
                          Three    Three      Nine     Three      Nine
                         months   months    months    months    months
                          ended    ended     ended     ended     ended
                      September     June September September September
                             30       30        30        30        30
                      ------------------------------------------------
Sales volumes
 (thousands
 of tonnes)
 Company produced         1,419    1,489     4,339     1,327     3,868
 Purchased and
  commission                395      312     1,059       485     1,661
                      ------------------------------------------------
                          1,814    1,801     5,398     1,812     5,529
Average realized
 methanol price
 ($ per tonne)           $  182   $  138    $  144    $  147    $  191
Income (loss) before
 the asset
 restructuring charge    $ 58.5   $ 15.7    $ 56.8    $(13.7)   $ 95.4
Net income (loss)        $ 58.5   $ 15.7    $ 56.8    $(24.7)   $ 84.4
EBITDA (1)               $108.0   $ 52.0    $170.6    $ 20.0    $229.8
Operating income (loss)  $ 79.8   $ 23.1    $ 85.4    $ (9.2)   $146.3
Cash flows from
 operating activities
 (2)                     $ 96.3   $ 46.5    $152.8    $ 17.3    $201.8
Basic net income (loss)
 per share before the
 asset restructuring
 charge                  $ 0.47   $ 0.12    $ 0.45    $(0.08)   $ 0.59
Basic net income (loss)
 per share               $ 0.47   $ 0.12    $ 0.45    $(0.15)   $ 0.52
----------------------------------------------------------------------

1 EBITDA represents net income (loss) before income taxes, interest 
  expense, interest and other income, depreciation and amortization,
  and asset restructuring charges, if any.  EBITDA can be calculated
  by adding depreciation and amortization back to operating income.  
  EBITDA should be considered in addition to, and not as a substitute 
  for, operating income (loss), net income (loss), cash flows and 
  other measures of financial performance reported in accordance with
  generally accepted accounting principles.  EBITDA differs from cash 
  flows from operating activities before changes in non-cash working 
  capital and the utilization of prepaid natural gas primarily because
  it does not include cash flows from interest, income taxes and asset
  restructuring charges.  Our method of computing EBITDA may not be 
  comparable to similarly titled measures reported by other companies.

2 Before changes in non-cash working capital and the utilization of
  prepaid natural gas.

Improved Financial Results

For the third quarter ended September 30, 2002, we recorded net income of $58.5 million ($0.47 per share) and EBITDA of $108.0 million. This compares to net income of $15.7 million ($0.12 per share) and EBITDA of $52.0 million for the second quarter ended June 30, 2002 and a loss before the asset restructuring charge of $13.7 million ($0.08 per share) and EBITDA of $20.0 million for the third quarter ended September 30, 2001. For the nine-month period ended September 30, 2002, we recorded net income of $56.8 million ($0.45 per share) and EBITDA of $170.6 million compared with income before the asset restructuring charge of $95.4 million ($0.59 per share) and EBITDA of $229.8 million for the same period in 2001.


EBITDA
The change in EBITDA resulted from:

($ millions)                           Q3-2002    Q3-2002 YTD Q3-2002
                                      compared   compared   compared
                                        with       with       with
                                       Q2-2002    Q3-2001 YTD Q3-2001
                                      -------------------------------
Higher (lower) realized price of
 produced methanol                         64         50       (205)
Lower cash cost                             2         30         87
Higher (lower) sales volume of produced
 methanol                                  (3)         4         39
Higher (lower) margin on the sale of
 purchased methanol                        (7)         3         16
Other, net                                  -          1          4
                                      -------------------------------
Increase (decrease) in EBITDA              56         88        (59)
                                      -------------------------------
                                      -------------------------------

Higher (lower) realized price of produced methanol - Methanol prices are characterized by volatility and are affected by the methanol demand/supply balance, which is influenced by global industry capacity, industry operating rates and the strength of demand.

Shutdowns of high cost capacity resulted in a tight demand/supply balance and higher methanol prices from mid-2000 to mid-2001. Methanol prices declined substantially in the second half of 2001, consistent with general economic conditions, and remained low in the first quarter of 2002. Supply limitations combined with some early signs of a recovery in demand have resulted in tight market conditions and higher methanol prices during the second quarter and third quarter of 2002.

Our average realized price for the third quarter of 2002 of $182 per tonne was $44 per tonne, or 32%, higher than the second quarter of 2002 price of $138 per tonne. The higher average realized price for produced methanol resulted in a $64 million increase in EBITDA in comparison with the second quarter of 2002. The average realized price for the nine-month period ended September 30, 2002 was $144 per tonne compared with $191 per tonne for the same period in 2001.

Lower cash cost - The most significant components of our cash costs are natural gas and distribution costs associated with delivering methanol to customers from our production facilities.

Our cash costs for the third quarter of 2002 decreased by $2 million compared with the second quarter of 2002 primarily because of lower natural gas costs for our facilities in Chile and Canada.

Our cash costs decreased by $30 million for the third quarter of 2002 compared with the same period in 2001 and decreased by $87 million for the nine-month period ended September 30, 2002 compared with the same period in 2001. Approximately half of the improvement for both periods relates to lower natural gas costs in Chile and North America. The remainder of the decrease relates primarily to lower fixed costs because of the shutdown of the Medicine Hat facility during the second half of 2001 and to lower ocean freight and other logistics costs. The decrease in ocean freight costs is the result of focussed initiatives to reduce our vessel costs and more efficient shipping patterns.

Higher (lower) sales volume of produced methanol - The increase in sales volume of produced methanol for the first nine months of 2002 compared with 2001 is the result of higher production volumes at our facilities in 2002 combined with lower purchases of spot methanol. Our sales volume of produced product in the third quarter of 2002 was slightly lower than in the second quarter of 2002.

Higher (lower) margin on the sale of purchased methanol - We incurred a loss of $5 million on the sale of 207,000 tonnes of purchased methanol in the third quarter of 2002 compared with income of $2 million in the second quarter of 2002 and a loss of $8 million in the third quarter of 2001. For the nine-month period ended September 30, 2002 we incurred a loss of $2 million compared with a loss of $18 million for the same period in 2001.

Depreciation and Amortization

Depreciation and amortization expense for the third quarter of 2002 was $28 million compared with $29 million for the third quarter of 2001. For the nine-month period ended September 30, 2002 depreciation and amortization expense was $85 million compared with $84 million for the same period in 2001.

Interest Expense and Interest and Other Income

Interest Expense - Interest expense for the third quarter of 2002 was $10 million compared with $8 million for the third quarter of 2001. The increase relates to the issuance of long-term debt at the end of the second quarter of 2002 partially offset by capitalization of interest for the construction of the Atlas methanol facility in Trinidad. For the nine-month period ended September 30, 2002 interest expense was $23 million compared with $25 million for the same period in 2001. The decrease relates to the capitalization of interest for Atlas partially offset by higher interest expense relating to the long-term debt issued at the end of the second quarter of 2002.

Interest and Other Income - Interest and other income for the third quarter of 2002 was $2 million compared with $3 million for the third quarter of 2001. For the nine-month period ended September 30, 2002 interest and other income was $9 million compared with $12 million for the same period in 2001 due primarily to lower average cash balances in 2002 compared with 2001.

Income Taxes

The effective income tax rate for the nine-month period ended September 30, 2002 was 20% compared with 31% for same period in 2001. The lower effective tax rate in 2002 is primarily explained by higher losses in 2001 in Canada where no income tax benefits were recorded.

Superior Operating Performance

For the quarter ended September 30, 2002, we operated our production facilities, excluding the idled Medicine Hat and Fortier plants, at 99% of capacity compared with 98% for the second quarter of 2002.

Demand/Supply Fundamentals

The demand/supply fundamentals are currently very favourable. Planned and unplanned methanol plant outages experienced in the first half of 2002 continued into the third quarter of 2002. Unplanned methanol plant outages have been typical of historical industry operating performance. These industry supply limitations combined with some early signs of a recovery in demand as the global economy starts to improve have resulted in low inventory levels, tight market conditions and higher methanol prices at a time when only limited new capacity is expected to impact the market to the end of 2003.

Methanol prices strengthened significantly during the second quarter of 2002 and remained strong throughout the third quarter. The Methanex non-discounted U.S. reference price has remained at $206 per tonne ($0.62 per gallon) throughout the quarter and into October. In Europe, the fourth quarter of 2002 contract transaction price was settled unchanged from the third quarter at EURO 208 before discounts ($202 per tonne at the time of settlement). Spot prices in the United States are currently in the range of $210 per tonne ($0.63 per gallon). Prices in Asia are currently between $194 and $205 per tonne.

Strategic Initiatives

Low-Cost Methanol Production Capacity

We are continuing to assess an 840,000 tonne per year expansion of our facility in Chile and the construction of a 2.0 million tonne per year methanol plant in Western Australia. We expect to make final decisions on both of these projects within the next year.

New Zealand Natural Gas

Production from the Company's New Zealand operations is dependent on the supply of gas from the Maui field. We estimate that our current contracted natural gas entitlements are sufficient to operate the New Zealand plants at capacity for the equivalent of approximately two and one-half years. During 2001, the owners of the Maui field announced that the Maui reserves may be materially less than previously estimated and below the aggregate of contract quantities. This could potentially reduce the amount of contracted gas available to Methanex. During the third quarter, an independent expert was appointed to evaluate and make a final determination of the available reserves in the Maui field. The report of the independent expert is expected by the end of 2002. The Company is continuing to pursue acquisitions of additional gas to supply our New Zealand plants. However, there can be no assurance that we will be able to secure additional gas in New Zealand at commercially acceptable terms.

Liquidity and Capital Projects

Cash flows from operating activities before changes in non-cash working capital and the utilization of prepaid natural gas in the third quarter of 2002 were $96 million compared with $46 million for the second quarter of 2002.

During the third quarter of 2002 we repaid the $150 million 7.40% notes that matured on August 15, 2002 from the proceeds of the $200 million 8.75% notes issued in June 2002.

During 2001 we commenced a share buyback program to repurchase up to 11.5 million common shares pursuant to a normal course issuer bid, which expired on August 9, 2002. During the course of the program we repurchased 9.9 million shares for a total cost of $68 million.

During the third quarter of 2002 we paid a quarterly dividend of $0.05 per share, or $6 million.

The Atlas project is a 1.7 million tonne per year methanol facility being constructed in Trinidad as a joint venture between Methanex (63.1%) and BP (36.9%). During the quarter ended September 30, 2002, our cash contribution to the Atlas project was $31 million. As at September 30, 2002, our total cash contribution to the project was $123 million. Our total equity contribution to the joint venture assuming project financing with 60% leverage is arranged as planned is expected to be approximately $100 million. When the project financing is completed, Methanex will receive back the contributions it has made in excess of its pro-rata share of the project funding requirements.

We have excellent financial capacity and flexibility. Our cash balance at September 30, 2002 was $288 million. We also have an undrawn $291 million credit facility. The planned capital maintenance expenditure program directed towards major maintenance, turnarounds and catalyst changes is estimated to total approximately $80 million for the period to the end of 2005. We have the financial capacity to complete the capital maintenance spending program and pursue new opportunities to enhance our strategic position in methanol.

Short-term Outlook

Tight market conditions and strong methanol pricing are continuing into the fourth quarter. In addition, only limited new capacity is expected to impact the market to the end of 2003. In this environment, we will continue to focus on maximizing the value generated from our low cost facilities and global market position. The methanol price, however, will ultimately depend on industry operating rates and the strength of global demand. We believe that our excellent financial position and financial flexibility, outstanding global supply network and low cost position will ensure that Methanex continues to be the leader in the methanol industry.

October 21, 2002

Methanex Corporation

Consolidated Statements of Income
                            3 months ended            9 months ended 
(unaudited)                  September 30              September 30
---------------------------------------------------------------------
(thousands of U.S.          2002        2001         2002        2001
 dollars, except 
 number of shares and
 per share amounts) 

Revenue                $ 296,509   $ 239,574    $ 701,799   $ 953,630
                                                                     
Cost of sales and
 operating expenses      188,495     219,484      531,185     723,845
Depreciation and
 amortization             28,193      29,251       85,205      83,535
---------------------------------------------------------------------
Operating income
 (loss) before
 undernoted items         79,821      (9,161)      85,409     146,250
                                                                     
Interest expense          (9,757)     (8,257)     (23,027)    (24,695)
Interest and other
 income                    2,224       3,482        8,700      12,476
Asset restructuring
 charge                        -     (11,060)           -     (11,060)
---------------------------------------------------------------------
Income (loss) before
 income taxes             72,288     (24,996)      71,082     122,971
                                                                     
Income tax recovery
 (expense)               (13,786)        271      (14,286)    (38,599)
---------------------------------------------------------------------
Net income (loss)      $  58,502   $ (24,725)   $  56,796   $  84,372
                                                                     
Retained earnings,
 beginning of period     376,447     493,929      397,310     384,832
Excess of repurchase
 price over assigned
 value of common
 shares                   (5,192)    (56,094)     (24,349)    (56,094)
Dividends paid            (6,225)          -       (6,225)          -
                                                                     
---------------------------------------------------------------------
Retained earnings,
 end of period         $ 423,532   $ 413,110    $ 423,532   $ 413,110
---------------------------------------------------------------------



Supplemental Information Relating to Consolidated Statements of Income

Income (Loss) Before
 the Asset
 Restructuring Charge                                                 
Net income (loss)       $ 58,502  $ (24,725)     $ 56,796    $ 84,372
Asset restructuring
 charge, before and
 after tax                     -      11,060            -      11,060
---------------------------------------------------------------------
Income (loss) before
 asset restructuring
 charge                 $ 58,502  $ (13,665)     $ 56,796    $ 95,432
---------------------------------------------------------------------



Weighted average
 number of common
 shares outstanding* 124,731,304 161,560,344  127,091,882 161,700,822
Diluted weighted
 average number of
 common shares
 outstanding*        127,180,762 161,560,344  129,260,342 162,925,100


Income (loss) per
 common share before
 asset restructuring
 charge                 $   0.47   $  (0.08)     $   0.45    $   0.59
Basic net income
 (loss) per common
 share                  $   0.47   $  (0.15)     $   0.45    $   0.52
Diluted net income
 (loss) per common
 share                  $   0.46   $  (0.15)     $   0.44    $   0.52

* number of common shares outstanding at September 30, 2002:
  124,573,192 (September 30, 2001: 133,355,817)



Methanex Corporation

Consolidated Balance Sheets                September 30   December 31
(unaudited)                                     2002          2001
---------------------------------------------------------------------
(thousands of U.S. dollars)                                          
                                                                     
Assets                                                               
                                                                     
Current assets:                                                      
 Cash and cash equivalents                  $   288,352   $   332,129
 Receivables                                    168,875       135,219
 Inventories                                    105,767        99,908
 Prepaid expenses                                16,227         8,685
---------------------------------------------------------------------
                                                579,221       575,941
                                                                     
Property, plant and equipment (note 2)        1,073,520     1,031,716
                                                                     
Other assets                                     81,129        85,693
---------------------------------------------------------------------
                                            $ 1,733,870   $ 1,693,350
---------------------------------------------------------------------
                                                                     
Liabilities and Shareholders' Equity                                 
                                                                     
Current liabilities:                                                 
 Accounts payable and accrued liabilities   $    99,025   $   110,281
 Current maturities on long-term debt and
  other long-term liabilities                     5,308       154,693
---------------------------------------------------------------------
                                                104,333       264,974
                                                                     
Long-term debt                                  449,612       249,535
                                                                     
Other long-term liabilities                      75,457        78,911
                                                                     
Future income taxes                             168,449       164,469
                                                                     
Shareholders' equity                                                 
 Capital stock (note 4)                         512,487       538,151
 Retained earnings                              423,532       397,310
---------------------------------------------------------------------
                                                936,019       935,461
---------------------------------------------------------------------
                                            $ 1,733,870   $ 1,693,350
---------------------------------------------------------------------



Methanex Corporation

Consolidated Statements of Cash Flows
                             3 months ended           9 months ended
(unaudited)                   September 30             September 30
---------------------------------------------------------------------
(thousands of U.S.
 dollars)                   2002        2001         2002        2001

Cash flows from
 operating
 activities:                                                         
Net income (loss)     $   58,502  $  (24,725)  $   56,796  $   84,372
Add :                                                                
 Depreciation and
  amortization            28,193      29,251       85,205      83,535
 Future income taxes       7,749       7,530        3,980      24,352
 Other                     1,860       5,200        6,868       9,589
---------------------------------------------------------------------

Cash flows from
 operating activities
 before undernoted
 changes                  96,304      17,256      152,849     201,848
                                                                     
Receivables and
 accounts payable and
 accrued liabilities     (15,814)     81,419      (38,078)     84,172
Inventories and
 prepaid expenses        (13,538)     34,922      (14,172)     24,627
Utilization of
 prepaid natural gas       2,758       1,586        2,274       1,226
---------------------------------------------------------------------
                          69,710     135,183      102,873     311,873
---------------------------------------------------------------------
Cash flows from
 financing
 activities:                                                         
Proceeds on issue of
 long-term debt                -           -      200,000           -
Financing costs                -           -       (5,776)          -
Repayment of
 long-term debt         (150,000)          -     (150,000)          -
Payment for shares
 repurchased             (10,791)          -      (55,974)          -
Issue of shares on
 exercise of
 incentive stock
 options                   1,266          60        5,961       6,422
Dividend payments         (6,225)          -       (6,225)          -
Repayment of other
 long-term
 liabilities              (3,952)     (3,373)      (5,107)     (5,236)
---------------------------------------------------------------------
                        (169,702)     (3,313)     (17,121)      1,186
---------------------------------------------------------------------
Cash flows from
 investing
 activities:                                                         
Plant and equipment
 under development       (35,273)    (34,468)    (113,055)    (41,587)
Property, plant and
 equipment                (4,742)     (5,386)      (7,371)    (13,956)
Accounts payable and
 accrued liabilities
 related to capital
 expenditures            (11,516)       (122)      (6,486)       (550)
Other assets              (1,130)       (900)      (2,617)        (57)
---------------------------------------------------------------------
                         (52,661)    (40,876)    (129,529)    (56,150)
---------------------------------------------------------------------
Increase (decrease)
 in cash and cash
 equivalents            (152,653)     90,994      (43,777)    256,909
Cash and cash
 equivalents,
 beginning of period     441,005     391,857      332,129     225,942
---------------------------------------------------------------------
Cash and cash
 equivalents, end of
 period               $  288,352  $  482,851   $  288,352  $  482,851
---------------------------------------------------------------------
                                                                     
Supplementary cash
 flow information:                                                   
---------------------------------------------------------------------
Interest paid, net
 of capitalized
 interest             $   13,467  $   15,376   $   25,328  $   30,850
Income taxes paid
 (received)           $     (127) $    5,088   $      112  $   11,553
---------------------------------------------------------------------

Methanex Corporation

Notes to Consolidated Financial Statements

(unaudited)

Nine months ended September 30, 2002

The consolidated financial statements are prepared in accordance with generally accepted accounting principles in Canada. The consolidated financial statements have been prepared from the books and records without audit, however, in the opinion of management, all adjustments which are necessary to the fair presentation of the results of the interim period have been made.

These consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Methanex 2001 Annual Report. Except with respect to the change in accounting policies described below, the accounting policies applied in these interim consolidated financial statements are consistent with those applied in the Annual Report.

1. Interest in Atlas Joint Venture

The Company has a 63.1% joint venture interest in Atlas Methanol Company ("Atlas"). The joint venture is constructing a 1.7 million tonne per year methanol plant in Trinidad. Construction is expected to be completed by the end of 2003.

The consolidated financial statements include the following amounts representing the Company's interest in the Atlas joint venture:

($ thousands)                September 30, 2002  December 31, 2001
------------------------------------------------------------------
Consolidated Balance Sheet
  Current assets                       $ 13,392           $  1,995
  Property, plant and equipment         146,862             63,131
  Current liabilities                     2,646              7,690
------------------------------------------------------------------

($ thousands)              Three      Three       Nine       Nine
                          months     months     months     months
                           ended      ended      ended      ended
                       September  September  September  September
                        30, 2002   30, 2001   30, 2002   30, 2001
-----------------------------------------------------------------
Consolidated Statement 
 of Cash Flows
 Cash outflows 
  from investing
  activities           $  31,452  $  34,468  $  88,775  $  41,587
-----------------------------------------------------------------

During the three months ended September 30, 2002, $2 million (September 30, 2001 - $nil) of interest was capitalized to plant and equipment under development. During the nine months ended September 30, 2002, $6 million (September 30, 2001 - $nil) of interest was capitalized to plant and equipment under development.

To September 30, 2002, the joint venture had no revenue and all expenditures were capitalized to plant and equipment under development.

The Company estimates that its remaining share of capital expenditures to complete the construction of Atlas will be approximately $121 million and will be incurred over the period to December 31, 2003. The Company expects that these expenditures will be funded from project financing, cash generated from operations and cash and cash equivalents. The Company's total equity contribution to the joint venture, assuming project financing is arranged as planned, is expected to be approximately $100 million.

2. Property, Plant and Equipment

                                         Accumulated 
(thousands)                      Cost   Depreciation  Net Book Value
--------------------------------------------------------------------
September 30, 2002
Plants                    $ 2,110,204    $ 1,237,679     $   872,525
Plant and equipment
  under development           181,485              -         181,485
Other                          39,363         19,853          19,510
--------------------------------------------------------------------
                          $ 2,331,052    $ 1,257,532     $ 1,073,520
--------------------------------------------------------------------
December 31, 2001
Plants                    $ 2,121,525    $ 1,179,372     $   942,153
Plant and equipment
  under development            68,460              -          68,460
Other                          37,581         16,478          21,103
--------------------------------------------------------------------
                          $ 2,227,566    $ 1,195,850     $ 1,031,716
--------------------------------------------------------------------

Included in property, plant and equipment are the idled Medicine Hat Plant 3 and the idled Fortier plant which are being maintained in a position to restart if conditions warrant this course of action. At September 30, 2002 these facilities had a combined net book value of $178 million (December 31, 2001 - $191 million).

3. Long-term Debt

On June 19, 2002 we completed the issue and sale of 8.75% senior notes due August 15, 2012 in an aggregate principal amount of $200 million.

On August 15, 2002 the Company repaid upon maturity $150 million of long-term debt.

4. Capital Stock

a) Changes in the capital stock of the Company during the period January 1, 2002 to September 30, 2002 were as follows:

                                           Number of   Consideration
                                       Common Shares    ($ thousands)
--------------------------------------------------------------------
Balance, December 31, 2001               131,167,942       $ 538,151
Issued on exercise of incentive
 stock options                               869,600           4,695
Shares repurchased                        (6,308,000)        (26,026)
--------------------------------------------------------------------
Balance, June 30, 2002                   125,729,542       $ 516,820
Issued on exercise of incentive
 stock options                               243,650           1,266
Shares repurchased                        (1,400,000)         (5,599)
--------------------------------------------------------------------
Balance, September 30, 2002              124,573,192       $ 512,487
--------------------------------------------------------------------

During the nine months ended September 30, 2002, the Company repurchased for cancellation 7.7 million common shares. The cost to acquire the shares in the amount of $56.0 million was allocated $31.6 million to capital stock and $24.4 million to retained earnings.

b) On June 14, 2002 the Company completed a solicitation of consents to an amendment to the indenture to modify the limitation on restricted payments covenant relating to our 7.75% notes due August 15, 2005. Under the indenture, the Company can pay cash dividends or make other shareholder distributions to the extent that shareholders' equity is equal to or greater than $850 million after giving effect to such payment or distribution. The indenture has been amended to permit the Company to declare and pay up to $30 million of dividends in any twelve-month period while our consolidated net worth is less than $850 million.

5. Net Income Per Share

A reconciliation of the weighted average number of common shares is as follows:

($ thousands)              Three       Three        Nine       Nine
                          months      months      months     months
                           ended       ended       ended      ended
                       September   September   September  September
                        30, 2002    30, 2001    30, 2002   30, 2001
--------------------------------------------------------------------
Denominator for basic
 net income per
 share               124,731,304 161,560,344 127,091,882 161,700,822
Effect of dilutive 
 stock options         2,449,458           -   2,168,460   1,224,278
--------------------------------------------------------------------
Denominator for 
 diluted net income 
 per share           127,180,762 161,560,344 129,260,342 162,925,100
--------------------------------------------------------------------

6. Stock Options

(a) Incentive stock options:

Common shares reserved for incentive stock options at September 30, 2002 were as follows:

                         Options denominated     Options denominated
                                in CAD$                 in US$
                            Number  Weighted       Number   Weighted
                          of Stock   Average     of Stock    Average
                           Options  Exercise      Options   Exercise
                                       Price                   Price
--------------------------------------------------------------------
Outstanding at December 
 31, 2001                8,690,750   $  10.0            -    $     -
Granted                          -         -    2,464,000       6.46
Exercised                 (869,600)     8.42            -          -
Cancelled                  (30,025)    11.39            -          -
--------------------------------------------------------------------
Outstanding at June 30,
 2002                    7,791,125   $ 10.28    2,464,000    $  6.46
Exercised                 (243,650)     8.17            -          -
Cancelled                  (22,500)    11.07            -          -
--------------------------------------------------------------------
Outstanding at September
 30, 2002                7,524,975   $ 10.34    2,464,000    $  6.46
--------------------------------------------------------------------

As at September 30, 2002, 5,628,838 incentive stock options were exercisable at an average price of CAD $11.09.

(b) Performance stock options:

As at September 30, 2002, 2,125,000 (December 31, 2001 - 2,125,000) performance stock options with an exercise price of CAD $4.47 per common share were outstanding. The vesting of the options is tied to the market value of the Company's common shares subsequent to the date of grant. After September 30, 2002, one-third of the options vest if the common shares have traded at or above CAD $10 per share subsequent to the date of grant; a further one-third vest if the common shares have traded at or above CAD $15 per share subsequent to the date of grant and the options are fully vested if the common shares have traded at or above CAD $20 per share subsequent to the date of grant. On October 1, 2002, 699,000 options vested and became exercisable as the common shares had traded above CAD $10 per share subsequent to the date of grant. These options expire September 30, 2009.

(c) Fair value method disclosure:

Effective January 1, 2002, the Company adopted the new recommendations of the Canadian Institute of Chartered Accountants with respect to the accounting for stock-based compensation and other stock-based payments. The new recommendations require equity instruments awarded to employees and the cost of the service received as consideration to be measured and recognized based on an estimate of the fair value of the equity instruments issued. Compensation expense is recognized over the period of related employee service, usually the vesting period of the equity instrument awarded. The new recommendations permit the measurement of compensation expense for stock option grants to employees and directors that are not direct awards of stock, stock appreciation rights or otherwise call for settlement in cash or other assets by a method other than a fair value based method and to provide pro forma disclosure of the financial results using a fair value based method.

The Company has elected to continue with the former accounting policy of recognizing no compensation expense when stock options are granted and to provide pro forma disclosure as if a fair value based accounting method had been used to account for stock-based compensation cost. The Company uses the Black-Scholes option pricing model to estimate the fair value of each stock option grant.

The pro forma net income and net income per share for the three-month period ended September 30, 2002 and the nine-month period ended September 30, 2002 are as follows:

($ thousands, except          Three months           Nine months
   per share amounts)             ended                  ended 
                           September 30, 2002    September  30, 2002
--------------------------------------------------------------------
Net income  - as reported        58,502                 56,796
Net income  - pro forma          57,468                 54,387
Net income per share - 
 as reported                       0.47                   0.45
Net income per share -
 pro forma                         0.46                   0.43
--------------------------------------------------------------------

The pro forma amounts exclude the effect of stock options granted prior to January 1, 2002. The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: risk-free interest rate of 5%, dividend yield of 0%, expected life of 5 years, and volatility of 35%.

The weighted average fair value of stock options granted during the nine months ended September 30, 2002 was $2.46 per share.

7. Natural Gas

Production from the Company's New Zealand operations is dependent on the supply of gas from the Maui field. We estimate that Methanex's current contracted natural gas entitlements are sufficient to operate the New Zealand plants at capacity for the equivalent of approximately two and one-half years. During 2001, the owners of the Maui field announced that the Maui reserves may be materially less than previously estimated and below the aggregate of contract quantities. This could potentially reduce the amount of contracted gas available to Methanex. During the third quarter, an independent expert was appointed to evaluate and make a final determination of the available reserves in the Maui field. The report of the independent expert is expected by the end of 2002. The Company is continuing to pursue acquisitions of additional gas to supply our New Zealand plants. However, there can be no assurance that we will be able to secure additional gas in New Zealand at commercially acceptable terms.

---------------------------------------------------------------------
Quarterly History                      YTD                           
(unaudited)                           2002     Q3     Q2     Q1      
---------------------------------------------------------------------
Methanol sales volume                                                
(thousands of tonnes)                                                
                                                                     
 Company produced product            4,339  1,419  1,489  1,431      
 Purchased product                     531    207    129    195      
 Commission sales (1)                  528    188    183    157      
---------------------------------------------------------------------
                                     5,398  1,814  1,801  1,783      
---------------------------------------------------------------------
                                                                     
Methanol production                                                  
(thousands of tonnes)                                                
                                                                     
 North America                         352    125    103    124      
                                                                     
 New Zealand                         1,729    593    601    535      
                                                                     
 Chile                               2,197    748    743    706      
---------------------------------------------------------------------
                                                                     
                                     4,278  1,466  1,447  1,365      
---------------------------------------------------------------------
                                                                     
Methanol price (2)                                                   
 ($/tonne)                             144    182    138    111      
 ($/gallon)                           0.43   0.55   0.42   0.33      
                                                                     
Per share information                                                
 Net income (loss)                  $ 0.45   0.47   0.12  (0.13)     


                                      2001     Q4     Q3     Q2    Q1
---------------------------------------------------------------------
Methanol sales volume                                                
(thousands of tonnes)                                                
                                                                     
 Company produced product            5,390  1,522  1,327  1,296 1,245
 Purchased product                   1,280    170    301    404   405
 Commission sales (1)                  720    169    184    146   221
---------------------------------------------------------------------
                                                                     
                                     7,390  1,861  1,812  1,846 1,871
---------------------------------------------------------------------
                                                                     
Methanol production                                                  
(thousands of tonnes)                                                
                                                                     
 North America                         445    127    123     93   102
                                                                    
 New Zealand                         2,133    592    520    447   574
                                                                     
 Chile                               2,783    662    710    708   703
---------------------------------------------------------------------
                                                                     
                                     5,361  1,381  1,353  1,248 1,379
---------------------------------------------------------------------
                                                                     
Methanol price (2)                                                   
 ($/tonne)                             172    115    147    200   225
 ($/gallon)                           0.52   0.35   0.44   0.60  0.68
                                                                     
Per share information                                                
 Net income (loss)                  $ 0.46  (0.10) (0.15)  0.25  0.43


                                      2000     Q4     Q3     Q2    Q1
---------------------------------------------------------------------
Methanol sales volume                                                
(thousands of tonnes)                                                
                                                                     
 Company produced product            5,815  1,324  1,398  1,548 1,545
 Purchased product                     814    305    245    133   131
 Commission sales (1)                  142    142      -      -     -
---------------------------------------------------------------------
                                                                     
                                     6,771  1,771  1,643  1,681 1,676
                                                                     
Methanol production                                                  
(thousands of tonnes)                                                
                                                                     
North America                          685    108    114    223   240
                                                                     
New Zealand                          2,410    593    620    607   590
                                                                     
Chile                                2,912    716    666    778   752
---------------------------------------------------------------------
                                                                     
                                     6,007  1,417  1,400  1,608 1,582
---------------------------------------------------------------------
                                                                     
Methanol price (2)                                                   
 ($/tonne)                             160    202    187    141   112
 ($/gallon)                           0.48   0.61   0.56   0.42  0.34
                                                                     
Per share information                                                
 Net income (loss)                  $ 0.85   0.40   0.35   0.17 (0.06)
                                                                     
(1) Sales of product from Titan plant in Trinidad. Methanex markets
    100% of Titan product.
(2) Produced and purchased product.



FOR FURTHER INFORMATION PLEASE CONTACT:

Methanex Corporation
Chris Cook
Manager, Investor Relations
(604) 661-2600 or Toll Free: 1-800-661-8851
Website: www.methanex.com
Email: invest@methanex.com

or

Methanex Corporation
Brad Boyd
Corporate Controller and Director, Investor Relations
(604) 661-2600 or Toll Free: 1-800-661-8851

or

CIBC Mellon Trust Company
Transfer Agents & Registrars
1-800-387-0825