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Methanex Reports Improved Q2 Results on Methanol Price Strength

July 17, 2002

VANCOUVER, BRITISH COLUMBIA--Methanex Corporation recorded net income of US$15.7 million (US$0.12 per share) and generated EBITDA (earnings before interest, income taxes, depreciation and amortization) of US$52.0 million for the second quarter ended June 30, 2002. The second quarter 2002 results compare to a net loss of US$17.4 million (US$0.13 per share) and EBITDA of US$10.6 million for the first quarter 2002, and to net income of US$40.3 million (US$0.25 per share) and EBITDA of US$86.8 million for the same period in 2001.

Pierre Choquette, President and CEO of Methanex commented, "We are now beginning to realize the benefits of tight methanol market conditions that started late in the first quarter. At US$138 per tonne, our average realized price for the second quarter was 24% higher than first quarter levels. Pricing strength is continuing into the third quarter. Our non-discounted US reference price for July is US$206 per tonne (US$0.62 per gallon), up from US$140 per tonne (US$0.42 per gallon) three months earlier. In addition, the European third quarter 2002 contract list price is EURO 208, or approximately US$205 per tonne (US$0.62 per gallon), a 43% improvement over the second quarter. Our low cost position combined with this strong methanol price environment should translate into even stronger financial results for the third quarter. The current tight methanol market conditions are further supported by the fact that there is minimal new capacity due to impact the market prior to 2004."

Mr. Choquette continued, "During the second quarter we were pleased to raise US$200 million through the issue of 8.75% senior notes due August 15, 2012. The proceeds will be used to repay the US$150 million 7.40% notes due August 15, 2002 and for general corporate purposes."

Mr. Choquette followed, "We continue to enjoy excellent financial strength and flexibility. Cash on hand at the end of June 2002 was US$441 million, of which US$150 million will be used to repay the notes due August 2002, and we also have an undrawn US$291 million credit facility." Mr. Choquette concluded, "We have the financial capacity to complete our capital maintenance spending program, fund our equity contribution for the construction of our new plant in Trinidad, repay the notes due August 2002 and pursue new opportunities to enhance our strategic position in methanol."

A conference call is scheduled for Thursday, July 18 at 11:00 am EDT (8:00 am PDT) to review these second 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 July 25th at (877) 653-0545. The reservation number for the playback version is 148069. 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.

Interim Report

For the three months ended June 30, 2002

At June 30, 2002, the number of common shares outstanding
was 125,729,542.

Contact Information

Methanex Investor Relations
1800 - 200 Burrard Street
Vancouver, BC Canada V6C 3M1

Share Information

Methanex Corporation's common shares are listed for trading on the
Toronto exchange under the symbol MX and on The Nasdaq Stock Market
under the symbol MEOH.

Transfer Agents & Registrars

CIBC Mellon Trust Company
393 University Avenue, 5th Floor
Toronto, Ontario, Canada M5G 2M7
Toll free in North America:
1-800-387-0825

Investor Information

All financial reports, news releases and corporate information can be
accessed on our web site at www.methanex.com. 

E-mail:
invest@methanex.com

Methanex Toll-Free:
1-800-661-8851

Management's Discussion and Analysis

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

This second 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    Six    Three     Six 
                              months   months  months  months   months
                               ended    ended   ended   ended    ended
                             June 30 March 31 June 30 June 30  June 30
                             -----------------------------------------
Sales volumes (thousands                                              
 of tonnes)                                                           
  Company produced             1,489    1,431   2,920   1,296    2,541
  Purchased and commission       312      352     664     550    1,176
                             -----------------------------------------
                               1,801    1,783   3,584   1,846    3,717
Average realized methanol
 price ($ per tonne)          $  138   $  111  $  125  $  200   $  213
Net income (loss)             $ 15.7   $(17.4) $ (1.7) $ 40.3   $109.1
EBITDA(1)                     $ 52.0   $ 10.6  $ 62.6  $ 86.8   $209.7
Operating income (loss)       $ 23.1   $(17.5) $  5.6  $ 60.0   $155.4
Cash flows from operating
 activities(2)                $ 46.5   $ 10.0  $ 56.5  $ 78.0   $184.6
Basic and diluted net income
 (loss) per share             $ 0.12   $(0.13) $(0.01) $ 0.25   $ 0.67
----------------------------------------------------------------------

(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.

Results from Operations

For the second quarter ended June 30, 2002, we recorded net income of $15.7 million ($0.12 per share) and EBITDA of $52.0 million. This compares to a net loss of $17.4 million ($0.13 per share) and EBITDA of $10.6 million for the first quarter ended March 31, 2002 and net income of $40.3 million ($0.25 per share) and EBITDA of $86.8 million for the second quarter ended June 30, 2001. For the six month period ended June 30, 2002, we recorded a net loss of $1.7 million ($0.01 per share) and EBITDA of $62.6 million compared with net income of $109.1 million ($0.67 per share) and EBITDA of $209.7 million for the same period in 2001.

EBITDA

The change in EBITDA resulted from:

($ millions)                   Q2-2002       Q2-2002     YTD Q2-2002  
                            compared with compared with compared with 
                               Q1-2002       Q2-2001     YTD Q2-2001  
                            ------------------------------------------
Higher (lower) realized
 price of produced methanol       40           (92)          (260)    
Lower cash cost                    -            31             58     
Higher sales volume of
 produced methanol                 1            18             40     
Higher margin on the sale
 of purchased methanol             1             8             13     
Other, net                        (1)            -              2     
                            ------------------------------------------
Increase (decrease) in
 EBITDA                           41           (35)          (147)    
                            ------------------------------------------

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 of 2002 and into the third quarter.

Our average realized price for the second quarter of 2002 of $138 per tonne was $27 per tonne, or 24%, higher than the first quarter of 2002 price of $111 per tonne. The higher average realized price for produced methanol resulted in a $40 million increase in EBITDA in comparison with the first quarter of 2002.

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

Our cash costs for the second quarter of 2002 remained consistent with the first quarter of 2002 as lower natural gas costs for our facilities in Chile were primarily offset by increased natural gas costs for our Kitimat facility.

Our cash costs decreased by $31 million for the second quarter of 2002 compared with the same period in 2001 and decreased by $58 million for the six-month period ended June 30, 2002 compared with the same period in 2001. Approximately half of the cash cost improvement for both periods relates to lower natural gas costs in Chile and North America. The remainder of the decrease in cash costs 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 a result of focussed initiatives to reduce our vessel costs and more efficient shipping patterns. Our other logistics costs are lower primarily because of a decrease in the European import duty rate and lower overall duties as a result of lower methanol prices.

Higher sales volume of produced methanol - The increase in sales volume of produced methanol is primarily the result of higher production volumes at our facilities in 2002.

Higher margin on the sale of purchased methanol - We earned a margin of $2 million on the sale of purchased methanol in the second quarter of 2002 compared with a margin of $1 million in the first quarter of 2002 and a loss of $6 million in the second quarter of 2001. For the six-month period ended June 30, 2002 we earned a margin of $3 million compared with a loss of $10 million for the same period in 2001.

Depreciation and Amortization

Depreciation and amortization expense for the second quarter of 2002 was $29 million compared with $27 million for the second quarter of 2001. For the six-month period ended June 30, 2002 depreciation and amortization expense was $57 million compared with $54 million for the same period in 2001. The increase for both periods primarily relates to an increase in the volume of produced methanol sold.

Interest Expense and Interest and Other Income

Interest Expense - Interest expense for the second quarter of 2002 was $7 million compared with $8 million for the second quarter of 2001. For the six-month period ended June 30, 2002 interest expense was $13 million compared with $16 million for the same period in 2001. The decrease for both periods is primarily due to the capitalization of interest for the construction of the Atlas methanol facility in Trinidad.

Interest and Other Income - Interest and other income for the second quarter of 2002 was $4 million compared with $5 million for the second quarter of 2001. For the six-month period ended June 30, 2002 interest and other income was $6 million compared with $9 million for the same period in 2001. A decrease in interest income in 2002 relating mainly to lower interest rates was primarily offset by foreign exchange gains recorded during the second quarter of 2002.

Income Taxes

The effective income tax rate for the second quarter of 2002 was 24% compared with 28% for the second quarter of 2001.

Operating Performance

For the quarter ended June 30, 2002, we operated our production facilities, excluding the idled Medicine Hat and Fortier plants, at 98% of capacity compared with 92% for the first quarter of 2002. During the first quarter of 2002 we had unplanned shutdowns for repairs at our facilities in Chile and New Zealand. In June 2002 we had an unplanned 17-day shutdown at our Kitimat facility due to a landslide that damaged the pipeline through which natural gas is supplied to the plant.

Demand/Supply Fundamentals

The demand/supply fundamentals are currently very favourable. Unplanned methanol plant outages in the first quarter of 2002 and into the second quarter, particularly in Asia, the Middle East and Africa continue to impact the methanol market. 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 remain strong early in the third quarter. The Methanex non-discounted U.S. reference price is $206 per tonne ($0.62 per gallon) for July compared with $140 per tonne ($0.42 per gallon) for April. In Europe, the third quarter of 2002 contract transaction price settled at EURO 208 before discounts ($205 per tonne at the time of settlement) an improvement of EURO 63, or 43%, over the second quarter of 2002. Spot prices in the United States are currently approximately $213 per tonne ($0.64 per gallon). Prices in Asia are currently between $175 and $189 per tonne.

MTBE

In April 2002, the U.S. Senate passed a comprehensive energy bill that included a provision to ban MTBE in the United States within four years of its enactment. The U.S. House of Representatives has also passed an energy bill, but it does not contain a provision to ban MTBE. The Senate and the House must proceed to conference to determine whether energy legislation can be agreed to by both parties and then passed by the U.S. Congress. It is uncertain whether the energy legislation will be agreed upon and passed by the whole U.S. Congress and if passed whether it will include a provision to ban MTBE.

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.

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 second quarter of 2002 were $46 million compared with $10 million for the first quarter of 2002.

On June 19, 2002 we completed the issue of $200 million 8.75% senior notes due August 15, 2012. The proceeds will be used to repay the $150 million 7.40% notes due August 15, 2002 upon their maturity and for general corporate purposes. We also successfully 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 amended indenture, we are permitted 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. There is no restriction on paying dividends while consolidated net worth is above $850 million.

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 expires on August 9, 2002. As at June 30, 2002 we had repurchased 8.5 million shares for a total cost of $57 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%). Construction is well advanced and is expected to be completed by late 2003. During the quarter ended June 30, 2002, our cash contribution to the Atlas project was $26 million. As at June 30, 2002, our total cash contribution to the project was $92 million, excluding the $17 million payment made in the third quarter of 2001 to acquire Beacon Energy Investment Fund's interest in the Atlas project. Our total equity contribution to the joint venture, excluding the Beacon payment and assuming project financing is arranged as planned, is expected to be approximately $100 million. We plan to complete the project financing during the third quarter.

We have excellent financial capacity and flexibility. Our cash balance at June 30, 2002 was $441 million, of which $150 million will be used to repay the notes due August 2002. 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 less than $80 million for the period to the end of 2004. We have the financial capacity to complete the capital maintenance spending program, fund our equity contribution for the construction of Atlas, repay the $150 million public bonds due in August 2002 and pursue new opportunities to enhance our strategic position in methanol.

Short-term Outlook

Supply disruptions and early signs of a recovery in demand have resulted in tight market conditions, low inventory levels and significantly improved methanol pricing into the third 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.

July 17, 2002

Methanex Corporation                                                  
                                                                      
                                       3 months           6 months    
Consolidated Statements of Income        ended              ended     
(unaudited)                             June 30            June 30    
----------------------------------------------------------------------
(thousands of U.S. dollars,          2002     2001     2002      2001 
 except number of shares and per
 share amounts)                                                       
                                                                      
                                                                      
Revenue                          $223,563 $341,114 $405,290  $714,056 
                                                                      
Cost of sales and operating
 expenses                         171,535  254,325  342,690   504,361 
Depreciation and amortization      28,959   26,824   57,012    54,284 
----------------------------------------------------------------------
Operating income before
 undernoted items                  23,069   59,965    5,588   155,411 
                                                                      
Interest expense                   (6,619)  (8,297) (13,270)  (16,438)
Interest and other income           4,111    4,709    6,476     8,994 
----------------------------------------------------------------------
Income (loss) before income taxes  20,561   56,377   (1,206)  147,967 
                                                                      
Income tax expense                 (4,890) (16,058)    (500)  (38,870)
----------------------------------------------------------------------
Net income (loss)                $ 15,671 $ 40,319 $ (1,706) $109,097 
                                                                      
Retained earnings, beginning of
 period                           373,370  453,610  397,310   384,832 
Excess of repurchase price over
 assigned value of common shares  (12,594)       -  (19,157)        - 
----------------------------------------------------------------------
Retained earnings, end of period $376,447 $493,929 $376,447  $493,929 
----------------------------------------------------------------------
                                                                      
Weighted average
 number of common                      162,371,459        161,772,225 
 shares outstanding *         126,965,224       128,291,902          

Basic and diluted net income
 (loss) per common share          $   0.12 $   0.25 $  (0.01)$   0.67 

* number of common shares outstanding at June 30, 2002: 125,729,542   
 (June 30, 2001: 162,499,266)                                         
                                                                      
                                                                      
Methanex Corporation                                                  
                                                                      
Consolidated Balance Sheets                June 30        December 31 
(unaudited)                                  2002             2001    
----------------------------------------------------------------------
(thousands of U.S. dollars)                                           
                                                                      
Assets                                                                
                                                                      
Current assets:                                                       
 Cash and cash equivalents            $   441,005      $   332,129    
 Receivables                              148,540          135,219    
 Inventories                               88,326           99,908    
 Prepaid expenses                          19,830            8,685    
----------------------------------------------------------------------
                                          697,701          575,941    
                                                                      
Property, plant and equipment           1,060,142        1,031,716    
                                                                      
Other assets                               86,070           85,693    
----------------------------------------------------------------------
                                      $ 1,843,913      $ 1,693,350    
----------------------------------------------------------------------

Liabilities and Shareholders' Equity                                  
                                                                      
Current liabilities:                                                  
 Accounts payable and accrued
  liabilities                         $   106,023      $   110,281    
 Current maturities on long-term
  debt and other long-term
  liabilities                             154,676          154,693    
----------------------------------------------------------------------
                                          260,699          264,974    
                                                                      
Long-term debt                            449,656          249,535    
                                                                      
Other long-term liabilities                79,591           78,911    
                                                                      
Future income taxes                       160,700          164,469    
                                                                      
Shareholders' equity                                                  
 Capital stock                            516,820          538,151    
 Retained earnings                        376,447          397,310    
----------------------------------------------------------------------
                                          893,267          935,461    
----------------------------------------------------------------------
                                      $ 1,843,913      $ 1,693,350    
----------------------------------------------------------------------
                                                                      
                                                                      
Methanex Corporation                                                  
                                                                      
Consolidated Statements of Cash Flows   3 months          6 months    
                                          ended             ended     
(unaudited)                              June 30           June 30    
----------------------------------------------------------------------
(thousands of U.S. dollars)          2002     2001     2002      2001 
                                                                      
Cash flows from operating
 activities:                                                          
Net income (loss)                $ 15,671 $ 40,319 $ (1,706)$ 109,097 
Add (deduct):                                                         
 Depreciation and amortization     28,959   26,824   57,012    54,284 
 Future income taxes               (1,067)   8,510   (3,769)   16,822 
 Other                              2,935    2,342    5,006     4,389 
----------------------------------------------------------------------

Cash flows from operating
 activities before undernoted
 changes                           46,498   77,995   56,543   184,592 
                                                                      
Receivables and accounts payable
 and accrued liabilities          (13,468)  (3,180) (22,264)    2,753 
Inventories and prepaid expenses   (9,712)  (9,327)    (633)  (10,295)
Utilization of prepaid natural gas   (274)    (164)    (484)     (360)
----------------------------------------------------------------------
                                   23,044   65,324   33,162   176,690 
----------------------------------------------------------------------

Cash flows from financing activities:                                 
Proceeds on issue of
 long-term debt                   200,000        -  200,000         - 
Financing costs                    (5,776)       -   (5,776)        - 
Payment for shares repurchased    (25,879)       -  (45,183)        - 
Issue of shares on exercise of
 incentive stock options            3,550    1,846    4,695     6,362 
Repayment of other long-term
 liabilities                         (630)    (898)  (1,154)   (1,863)
----------------------------------------------------------------------
                                  171,265      948  152,582     4,499 
----------------------------------------------------------------------

Cash flows from investing activities:                                 
Plant and equipment
 under development                (46,927)       -  (77,782)        - 
Property, plant and equipment      (1,233)  (8,895)  (2,629)  (15,689)
Accounts payable and accrued
 liabilities related to capital
 expenditures                       9,704     (200)   5,030      (428)
Other assets                       (1,464)     826   (1,487)      843 
----------------------------------------------------------------------
                                  (39,920)  (8,269) (76,868)  (15,274)
----------------------------------------------------------------------
Increase in cash and cash
 equivalents                      154,389   58,003  108,876   165,915 
Cash and cash equivalents,
 beginning of period              286,616  333,854  332,129   225,942 
----------------------------------------------------------------------
Cash and cash equivalents, end
 of period                       $441,005 $391,857 $441,005  $391,857 
----------------------------------------------------------------------

Supplementary cash flow information:                                  
----------------------------------------------------------------------
Interest paid, net of
 capitalized interest            $      - $    128 $ 11,861  $ 15,474 
Income taxes paid (received)     $   (138)$  9,122 $    377  $ (6,465)
----------------------------------------------------------------------

Methanex Corporation

Notes to Consolidated Financial Statements

(unaudited)

Six months ended June 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 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)                    June 30, 2002    December 31, 2001
--------------------------------------------------------------------
Consolidated Balance Sheet
 Current assets                     $   20,801            $   1,995
 Property, plant and equipment         127,656               63,131
 Current liabilities                    14,892                7,690
--------------------------------------------------------------------

($ thousands)       Three months Three months Six Months Six Months
                       ended        ended       ended      ended 
                      June 30      June 30     June 30    June 30
                        2002         2001        2002       2001
--------------------------------------------------------------------
Consolidated Statement
 of Cash Flows
  Cash outflows 
   from investing 
    activities     $  28,258      $     -   $  57,323     $    -
--------------------------------------------------------------------

During the six months ended June 30, 2002, $3.6 million (June 30, 2001 - $nil) of interest was capitalized to plant and equipment under development.

To June 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 $139 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. At June 30, 2002, the Company estimates its future cash equity contribution to the project will be approximately $8 million.

2. Long-term debt:

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

3.Capital Stock and Share Repurchase

a) Changes in the capital stock of the Company during the period January 1, 2002 to June 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                              270,000           1,145
Shares repurchased                       (3,108,000)        (12,741)
----------------------------------------------------------------------
Balance, March 31, 2002                 128,329,942     $   526,555
Issued on exercise of incentive
 stock options                              599,600           3,550
Shares repurchased                       (3,200,000)        (13,285)
----------------------------------------------------------------------
Balance, June 30, 2002                  125,729,542     $   516,820
----------------------------------------------------------------------

During the six months ended June 30, 2002, the Company repurchased for cancellation 6.3 million common shares. The cost to acquire the shares in the amount of $45.1 million was allocated $25.9 million to capital stock and $19.2 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 amended indenture, the Company is permitted 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. There is no restriction on paying dividends while consolidated net worth is above $850 million.

4.Net Income Per Share

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

                    Three months Three months  Six Months  Six Months
                        ended        ended        ended       ended 
                       June 30      June 30      June 30     June 30
                         2002         2001         2002        2001
----------------------------------------------------------------------
Denominator for basic
 net income per share 126,965,224  162,371,459 128,291,902 161,772,225
Effect of dilutive 
 stock options          2,019,842    1,973,422           -   1,460,277
----------------------------------------------------------------------
Denominator for 
 diluted net 
  income per share    128,985,066  164,344,881 128,291,902 163,232,502
----------------------------------------------------------------------

5. Stock Options

(a) Incentive stock options:

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

                         Options denominated      Options denominated 
                               in CAD$                   in US$       
                                    Weighted                 Weighted 
                       Number of     Average  Number of       Average 
                         Stock      Exercise    Stock        Exercise 
                        Options       Price    Options         Price  
----------------------------------------------------------------------
Outstanding at
 December 31, 2001    8,690,750     $ 10.09           -         $   - 
Granted                       -           -   2,449,000          6.45 
Exercised              (270,000)       6.73           -             - 
Cancelled                (4,750)       7.35           -             - 
----------------------------------------------------------------------
Outstanding at
 March 31, 2002       8,416,000     $ 10.20   2,449,000        $ 6.45 
Granted                       -           -      15,000          8.82 
Exercised              (599,600)       9.18           -             - 
Cancelled               (25,275)      12.15           -             - 
----------------------------------------------------------------------
Outstanding at
 June 30, 2002        7,791,125     $ 10.28   2,464,000        $ 6.46 
----------------------------------------------------------------------

As at June 30, 2002, 6,225,531 incentive stock options were exercisable at an average price of CAD$11.01.

(b) Performance stock options:

As at June 30, 2002, 2,125,000 (December 31, 2001 - 2,125,000) performance stock options are outstanding and 708,333 will vest and be exercisable after September 30, 2002.

(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 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. Alternatively, 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 an alternative method and to provide pro forma disclosure of the financial results using the fair value method. The Company has elected to follow an alternative method and continue with the former accounting policy of recognizing no compensation expense when stock options are granted because the Company grants stock options with an exercise price based on the market price at the date of the grant.

Had compensation expense been determined based on the fair value method, the Company's net loss and net loss per share for the six months ended June 30, 2002, would have been adjusted to the pro forma amounts indicated below:

                                         Three months     Six months 
                                             ended           ended   
($ thousands, except per share amounts)  June 30, 2002  June 30, 2002
---------------------------------------------------------------------
Net income (loss) - as reported             15,671          (1,706)  
Net income (loss) - pro forma               14,637          (3,081)  
Net income (loss) per share - as
 reported                                     0.12           (0.01)  
Net income (loss) per share - pro
 forma                                        0.12           (0.02)  
---------------------------------------------------------------------

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 six months ended June 30, 2002 was $2.46 per share.

6. 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. The process to determine the available reserves in the Maui field is expected to be completed 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        Q2       Q1 
---------------------------------------------------------------------
Methanol sales volume                                                
(thousands of tonnes)                                                
                                                                     
 Company produced product                   2,920     1,489    1,431 
 Purchased product                            325       129      195 
 Commission sales(1)                          340       183      157 
---------------------------------------------------------------------
                                            3,584     1,801    1,783 
---------------------------------------------------------------------
Methanol production                                                  
(thousands of tonnes)                                                
                                                                     
 North America                                227       103      124 
                                                                     
 New Zealand                                1,135       601      535 
                                                                     
 Chile                                      1,448       743      706 
---------------------------------------------------------------------
                                            2,810     1,447    1,365 
---------------------------------------------------------------------
Methanol price(2)                                                    
 ($/tonne)                                    125       138      111 
 ($/gallon)                                  0.38      0.42     0.33 
                                                                     
Per share information                                                
 Net income (loss)                        $ (0.01)     0.12    (0.13)


Quarterly History                     YTD                            
(unaudited)                          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 


Quarterly History                       YTD                          
(unaudited)                            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:

Chris Cook
Manager Investor Relations
(604) 661-2600 or Toll Free: 1-800-661-8851

or

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

or

Methanex Corporation
1800 - 200 Burrard St.
Vancouver, BC Canada V6C 3M1
Investor Relations: (604) 661-2600
Website: www.methanex.com
Toll Free: 1-800-661-8851