Hello, and welcome to OCI N.V. First Quarter of 2022 Results. My name is Elliot, and I'll be coordinating your call today. If you would like to register a question during the presentation, you may do so by pressing star followed by one on your telephone keypad. I would now like to introduce our host, Hans Zayed, Group Investor Relations Director. The floor is yours. Please go ahead. Thank you. Good afternoon, and good morning to our audience in the US. Thank you for joining the OCI N.V. first quarter 2022 conference call. With me today are Ahmed El-Hoshy, our Chief Executive Officer, and Hassan Badrawi, our Chief Financial Officer. On this call, we will review OCI's key operational events and financial highlights for the quarter, followed by the discussion of OCI's outlook. As usual, at the end of the call, we will host a question-and-answer session. The quarterly report, financial statements, and the presentation are available on our IR website. I would like to remind you that any forward-looking statements made on this call involve risks, and the actual results could differ materially from those statements. With that, let me hand over to Ahmed. Thank you, Hans, and thank you all for joining us today. We're pleased to announce another set of excellent quarterly results with an adjusted EBITDA of just under $1 billion for the quarter and $3 billion for the trailing twelve-month period, and a reduction in net debt by approximately $1.8 billion in the past two quarters alone on the back of solid free cash flows, taking us down to a very low net leverage level of 0.4x on a consolidated basis. Despite Q1 typically being the weaker quarter out of the Q2 seasonal strength, quarter, this is a continuation of our strong performance in fourth quarter of last year when our end market started recovering from a prolonged five plus year downturn, and we're already starting to see things get tighter. The conflict in Ukraine and subsequent sanctions on Russia has heightened the global nitrogen grain and energy markets even further over the past few months, and these supply and trade challenges could extend well into 2023 and beyond. As many of you know, the difficulty associated with this crisis is large because Russia and Ukraine account for almost 30% of global grain exports. About 28% for wheat, 18% for corn, as well as on the nitrogen fertilizer side, 25% of ammonia and UAN exports and around 15% of urea trade globally. Very big effect on our markets. At OCI, we aim to address potential grain shortfalls and overall food security concerns by producing as much product as possible and filling in supply gaps that may arise. That's the message to our global team, and I'm happy to say that everybody is taking that in full stride, and we're putting our heads down to try to achieve that following our operational excellence strategy, which we've been pursuing for the last several quarters, and it's part of our medium-term plan. I'd like to thank all of our employees for helping to make this happen and for their strong commitment to improving and growing our business at the same time. A lot of hard work has gone into bringing us to this point, and I'm pleased with what our dynamic team and state-of-the-art asset base can accomplish. As we discussed in February, we're excited about our strategic growth opportunities that can both decarbonize and grow our asset base in a value-creating way for the future hydrogen economy, while also returning capital to our shareholders. We will discuss our capital allocation priorities in more details as well today. Before we go into more details, as always, I'd like to cover our top priority, safety, as we want all our employees and contractors to go home safe every day at OCI. Our twelve-month reportable incident rate at the end of March was 0.35 incidents per 200,000 man-hours, at the same levels as of the end of 2021 and well below industry averages. Despite being below these industry averages, we continue to stress our relentless focus on operational and process safety and avoid incidents at all costs. We also see safety as a virtuous circle. As we improve and focus on occupational and process safety, reliability, and even energy efficiency will increase, all part of our operational excellence program. Turning now to some of the highlights of our performance during the quarter. Our own produced sales volumes were 13% lower at 2.6 million metric tons during Q1 2022 compared to Q1 2021. This can be explained by two main reasons. Firstly, on the nitrogen side, there was a more significant shift of sales volumes from the first into the second quarter of this year as we built up inventories of approximately 400,000 tons. The US spring application started late in the quarter due to cold and wet weather and some shipments from Fertiglobe also moved from Q1 to Q2. With the majority of our volumes already committed for Q2, we're now benefiting from a combination of strong in-season demand in Q2 and from higher net backs, which sets us up for an even better performance this quarter in Q2. This also provides good visibility ahead and sets us up for a strong second half of the year. I'd like to also highlight our Dutch nitrogen operations, which did well as we continue to operate and maximize our downstream production in Europe by sourcing ammonia volumes from our operations in the Middle East via Fertiglobe as well as in the US to support our downstream production. By doing so, our underlying performance in Europe improved year-over-year, and we continued to provide essential nitrogen fertilizers to our European agricultural customers. This unique supply chain is one we can leverage in the future by importing low and no carbon hydrogen in the form of ammonia and methanol, which can help decarbonize the EU and reduce its reliance on imported natural gas during these difficult times by reducing natural gas consumption and importing the product, whether it's ammonia or methanol. Secondly, from a volume perspective, methanol volumes declined 44% year-over-year as BioMCN remained shut due to the high gas price environment in Europe, since we shut the plant down in middle of last year. We also had some downtime at Beaumont, but that was partially offset by higher production at Natgasoline. Lastly, I'm happy to report continued strong improvement in our financial standing and balance sheet, which positions us well for returning capital to shareholders, as well as pursuing. allowing us to pursue our unique decarbonization growth initiatives. I'll now hand it over to Hassan to discuss the financial results in more details. Thank you, Ahmed. I'll begin by commenting on what was a transformational series of events for the company these last few weeks. We are pleased with the recognition for our performance and trajectory from all three credit rating agencies, including S&P, Moody's and Fitch, who all upgraded OCI to investment grade a few weeks ago, all with a stable outlook, mentioning OCI's financial policy, strong underlying performance and supportive market fundamentals. This follows a significant transformation in our capital structure and consistent deleveraging over the past two years, with net leverage reaching 0.4x at the end of Q1, as Ahmed mentioned in his introductory remarks. Our consolidated gross debt further declined by $781 million during the first quarter to just over $3 billion. Net debt dropped by $960 million during the quarter to $1.26 billion. The ratings upgrade coincided with the successful refinancing in full of the Iowa Fertilizer Company existing bonds, previously existing sort of project finance-like debt to a $835 million tax-exempt municipal bond offering. This refi extended the average life of the debt from 7.5 years to 22 years, with maturities through 2050, issued at a yield below 5%. The bonds received an investment grade rating. Although issued by IFCo, they sit fully upstream of OCI N.V. debt, giving us the benefits of the, you know, diversified debt in the U.S. tax-exempt municipal bond market, while pricing reflecting OCI N.V. business profile. This refi removes all previously existing restrictions on dividends from IFCo and dissolves all covenants. Simultaneously, we also successfully restructured our revolving credit facility, which we upsized to $1.1 billion from $850 million, with a 43% reduction in cost. The RCF is currently fully undrawn. The restructure also triggered all our debt to become fully unsecured across all NV debt instruments, another milestone for the company. Turning to the quarter's results. OCI's consolidated revenue increased by 108% to $2.3 billion, and our adjusted EBITDA rose by 115% to just under $1 billion in the first quarter compared to the same quarter last year, as we continue to benefit from higher prices for all our products. Q1 EBITDA can be considered higher than the fourth quarter of 2021 if we exclude the EUA gains of $90 million we made in BioMCN during the fourth quarter. Our consolidated adjusted income also saw a marked improvement and reached $352 million for the quarter. Our reported net income increased by 316% to $410 million. We also generated $609 million of free cash flow during the quarter, excluding $375 million of gross proceeds we received in February for the sale of 15% stake in our methanol group, resulting in the aforementioned decrease of $960 million in net debt. We achieved this result despite net working capital outflows of $196 million during the quarter due to a buildup of inventories ahead of the application season. With these results and balance sheet improvements, we are committed to returning capital to shareholders and balancing that with further value creation through looking at highly accretive opportunities. All, of course, within the framework of continuing to maintain our investment grade status. With regard specifically to return of capital to shareholders, we announced a distribution for the second half based on the second half of last year of EUR 1.45 per share, which is on schedule to be paid in June. Based on our current outlook, expected free cash flow for H1 2022, we believe that this could support a significantly higher cash distribution in our next payment to shareholders, which is scheduled for October 2022. With regards to growth opportunities and our forward-looking CapEx, we continue to make good progress in efforts to capture various opportunities from emerging demand for blue and green hydrogen as we aim to leverage our existing sites' unique strategic advantages. We are continuously developing, evaluating, exploring such projects across our platform, and this could result in new investments translating into growth CapEx. Looking forward, we estimate up to $350million-$450 million of growth CapEx for 2023, which includes previously announced projects. However, ultimately, all projects will depend on factors such as governmental policies, incentives, and market developments. Looking at such projects, this will be all our growth plans are subject to, of course, maintaining our commitment to remain investment grade, re-meeting our investment return threshold, and our capital allocation strategy needs to ensure consistent distribution to shareholders while pursuing such growth opportunities. There is no change to our 2022 guidance as we continue to expect around $300 million of maintenance CapEx. In addition, we expect to be within the range of $75 million-$150 million of growth CapEx, depending on the various progress on existing projects. With that, I invite Ahmed to provide further commentary and color. Thanks, Hassan. We're excited about 2022 and beyond as the outlook remains positive for the foreseeable future. If I start with the outlook for nitrogen markets, the broader nitrogen market outlook for the next years is looking highly promising, with several key drivers supporting a multiyear structural tightening and demand-driven market pricing that started in the second half of last year. Firstly, strong crop prices and corn futures above $6 to the end of 2024, driven by decade-low stocks-to-use ratios, which require more than 2 seasons or so to replenish, assuming strong nitrogen application is one major driver from a demand perspective. These crop prices, as a result, healthy farm economics, highly incentivized farmers increase acres across all crops and maximize yield by using more nitrogen in grain exporting regions such as the U.S., Brazil, Europe and Australia, where demand is expected to be robust in 2022 and 2023. In India, we also expect strong import demand for urea in 2022, with a series of tenders expected to be issued over the coming months, including one that's going on this week, to replenish low stock levels and support kharif demand, which is expected to be higher than last year, given forecasts of good monsoons and nitrogen subsidies in place supportive of farm economics. This obviously is important so that we can continue to produce as much crops, get higher yields, reduce costs, and add more supply and increase our stock-to-use ratios globally on the grain side. Secondly, global input costs are raised for the medium term and as demand growth exceeds supply, pricing supports remain above these high marginal cost floors even during periods of high volatility. Gas price futures in Europe currently indicate approximately $30/MMBtu for 2022, and $23/MMBtu for 2023-2024. To put this into perspective, the higher feedstock prices are providing strong support for our product selling prices, with the marginal cost nitrogen producers in Europe setting support levels for ammonia to over $1,300 per ton in 2022, and $900 per ton in 2023 and 2024. These costs include CO2. This is based on the forward curve. That's 4x-5x higher than the low $200 per ton support level we saw during the downturn between 2015 and 2020. Two other factors are tightening markets even further. 3 million tons of new capacity has been expected to start up in Russia in the next three years, but these are now subject to meaningful delays and potentially even risk of cancellation. Outside this, net urea capacity additions in the next five years is more than offset by demand growth, resulting in a market deficit of 9 million metric tons over the medium term. The Chinese government has also implemented China Inspection and Quarantine controls to curb exports and prioritize domestic supply until the second half of this year. Very recent reports suggest this could last until the middle of 2023, which has the potential to tighten the markets even further. These inspection measures mean that Chinese producers can apply for export licenses. This currently though takes 45-60 days, but only limited volumes of exports are likely to be allowed. As such, we expect that China will export some volumes over the second half of this year with the end of the domestic application season, which we typically see towards the middle of the year. Exports are expected to be significantly below the levels seen in prior years, with recent developments like the one I just talked about here suggesting exports for the full year 2022 may actually be under prior estimates, which have been in the market of around 3 million tons. Finally, the merchant ammonia market is also structurally tightening, with very limited supply growth resulting in a supply deficit of 4 million tons over the 2022-2026 period, compared to the net surplus of 7 million tons in the 2015-2019 period. This does not even take into account the additional demand upside from emerging blue and green ammonia demand, which as we've said previously, should start to pick up quite significantly towards the middle of the decade and definitely towards the latter half or the end of the decade. Now shifting our attention to the methanol market. Methanol market fundamentals remain healthy, supported by higher oil prices and strong demand for several derivative segments including MTBE, MMA and formaldehyde. There are also no new major methanol supply production points expected to come on stream in 2022. Methanol to olefins, or MTO operating rates in China have also recovered to more than 80% in the first quarter and are expected to remain healthy in the quarters ahead, with the affordability of methanol currently at very attractive levels. A new 1.8 million ton per year MTO facility is also starting up in China later this year, which should provide a further boost to demand. Today, methanol can be used as a low cost and cleaner alternative for multiple fuel applications worldwide, including heating and transportation, as it is cheaper than LNG and gasoline. Methanol is easy to ship and store and is a clean burning fuel that produces fewer harmful pollutants such as SOx and NOx. The heating value of methanol today where we stand is the cheapest it's been in the last decade relative to LNG and some of these oil products like gasoline. Which we think can result in significant potential demand upside as additional methanol blending in gasoline can, for example, meaningfully reduce fuel bills for major companies, blenders, as well as governments. Basically substituting in methanol for ethanol or substituting in methanol for gasoline is a way where we could see more demand enter the market and it also saves money for the ultimate end user. As we've said, it's an easily transported and stored product that's familiar to a lot of these major players. Also, we also have strong visibility on the medium-term pricing environment as we continue to expect tighter methanol market fundamentals with incremental demand expected to exceed new supply by 8 million tons through 2026. This, like in the case of ammonia, does not consider the additional upside from hydrogen fuel demand, and we've obviously seen steps in that direction on the methanol side, particularly in the marine space. To conclude, before we go into Q&A, we're excited about the prospects for the company. In 2021 and 2022 year to date, we saw the start of a strong and we believe sustained general improvement in nitrogen pricing after a protracted downturn. We expect prices to come down from today's levels over time, but to much higher marginal cost floors on the nitrogen side than we've seen in the past. OCI's nitrogen and methanol assets are favorably positioned on the global cost curve, and we are a net beneficiary of a higher and volatile global gas price environment. In addition, we have some long-term hedges in place for all our operations in the United States for the next five plus years that we believe are at attractive price levels. Obviously we have the Fertiglobe advantaged gas pricing from a supply perspective. Our end markets are looking positive into at least 2024. Higher crop prices, healthy farm economics, and feedstock spreads between regions give strong support for nitrogen prices to remain above historical averages. We also see large upside from additional demand emerging in a range of new applications and sectors, due to the hydrogen transition on a hydrogen economy, notably for road and marine fuel applications where ammonia and methanol are ideally positioned, as well as in the power markets. This represents meaningful long-term upside, and we continue to search for and evaluate opportunities to grow and decarbonize our business further. We're growing our green fuels business, and we recently added green MTBE to our products portfolio. We are also expanding our geographic footprint across Europe with sales into Germany. This business has now become a high double-digit to low triple-digit annual EBIT, annualized EBITDA contributor over a very short timeframe, and I commend the team for getting us to this point. We're ideally positioned as we leverage our global competitive global platform, world-scale young assets and strong logistics platform to harmonize our hydrogen strategy with our continued focus on shareholder value. With that, we'll open the line for questions. Thank you. For our Q&A, if you would like to ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. When preparing to ask a question, please ensure your device is unmuted locally. Our first question today comes from Christian Faitz from Kepler. Your line is open. Please go ahead. Yes, sir. Thank you. Good afternoon, everyone. Congrats on the results. Two questions please. First, are you still shipping large amounts of ammonia from North Africa into Europe as we speak? The second question was, I was surprised by your robust volume performance in DEF. Is that due to more miles driven again or also due to market share gains? Thank you. Two very relevant questions. On the first one, we have this supply chain where we've been kind of just, you know, quite rapidly sending product into into Europe from the Middle East, even prior to the H2 2021 period, leveraging the Rotterdam ammonia export terminal that we have. We significantly increased that volume in Q4. We did so as well in Q1. We're doing so as well in Q2. In terms of how much we do it kind of depends on that spread and, we talked about it a bit with some of the investors, between where is ammonia and where is gas. You saw gas up double digits to date, which is increasing the marginal for on the ammonia production. We expect to see some more curtailments and potentially more ammonia demand. When ammonia prices go back up, some people may restart for a period of time. It's just having that flexibility with the storage there, with our domestic consumption and production of ammonia in OCI Nitrogen, coupled with the supply point, whether it's ourselves or third-party traded product, that we're there to try to meet that demand and reduce reliance on natural gas when it gets to elevated levels. Obviously that's a you know premium business because not only do we upgrade that to make more European fertilizer and industrial products for our customers, but we have also ammonia customers on demand as well for our distribution business in Europe. On the second question with DEF. Yeah, I mean, DEF has been a huge focus of ours at OCI, as you know. We've grown our market share significantly in the U.S. Our team, I think, is one of the best teams that are in the market via N-7 marketing, not just IFCo's products, but also Dakota Gasification's and Dyno Nobel's urea liquor and DEF in the United States. We've seen more vehicle miles driven, things that people probably look at diesel prices as well, and they, you know, where there's an ability to, you know, have a little bit more DEF, which improves the fuel economy. I think that's gonna be continually more a medium-term driver of demand as well to have higher dosage rates. We've seen good and solid demand and really commend the team on the production side as well as on the distribution side for getting it out to, you know, all parts of the United States to serve the customer base. That's been important because obviously the U.S. is still a net importer of DEF, but with the pricing levels that you've seen for urea, the pricing level for DEF, and some of the production in Europe, which was historically exporting into the United States, you know, that's had more trouble and I think, you know, we've the team's done a great job of getting more market share. Okay, great. Thanks so much. Our next question comes from Kyle Hong from Citi. Your line is open. Please go ahead. Hi, Ahmed. Thank you very much for taking the questions. I have three please, if I could. The first one is around the U.S. Through mid-May and N-7, maybe just give us an idea of the U.S. farmer sentiment currently. There have been reports of bad weather and maybe some high price hesitation. How do you see the U.S. market playing out over the rest of the year? Okay. One question is that. Sure. Sorry, yeah. Um, the- Okay. On the US side, I mean, we just are kind of completing what is typically the ammonia application season in the Midwest. You know, the weather has not been very good in terms of wetness and cold weather. We've had less ammonia go down from a nitrogen perspective. But if you recall, the fall was a very strong application season for ammonia. A lot of nitrogen's been put in the ground already for this planting season. Those are the kind of thoughts where nitrogen are kind of committed towards nitrogen to some extent. We're a bit tighter in terms of corn, wheat, applications. Corn and wheat are planting at this point, so we're behind, you know, historical averages, but they can move quite quickly, and weather has really improved over the last few weeks. What we think that means is probably that nitrogen, which is gonna be necessary to meet the yield ambitions of the farmers, will come in the form of probably more urea in the Northern Plains and quite certainly more UAN as well. That could extend the season into July with more side dressing in the markets and some pivot applications for nitrates. You know, we think that there could be some substitution, but we still think that it'll be a strong planting season overall, if the weather continues to look as it does here for the next several weeks. The margins on the farm side, you know, while nitrogen prices are up significantly, grain prices are up, you know, significantly as well. I think we shared on our investor presentation today that farm economics, particularly U.S. farmer, are extremely robust at today's grain prices and future grain prices. That's great. Thank you very much. My second is around methanol. It seemed methanol US performs pretty well. What went wrong historically with Natgasoline? Kind of what have you done to rectify that? You had a big turnaround. Sort of what steps have you taken to future-proof it? Natgasoline, I mean, that plant started up three years ago, so three Junes ago, right? 2018. Six years. Yeah. I guess almost four years now. We had our inaugural turnaround there, which was long and complicated and affected our Q3 and Q4 results last year, where we tried to address a lot of the issues. I think the team working with both sponsors, OCI as well as Proman, really looked hard about what we could address during this downtime, which was extended. There were some of these issues that have been lingering since commissioning that we were studying and looking for opportunities to address. I think the team, you know, did a good job of addressing things that are associated with an external boiler. There were certain other pieces of equipment which had a lot of focus. The other element, you know, while these are large pieces of equipment, another large element is the people that run the plant. I mean, it's very important for all our nine assets globally. We've continued to bolster the team as well as the support from the sponsors to do so, and we hope to continue to improve volumes at the Natgasoline site, you know, over the next few quarters as part of our overall operational excellence program. That's brilliant. Thank you. Just lastly, my final question is around nitrates. CAN volumes were down 11% and your UAN up 18%. What's the story there? Is it just a straight product swap or is there something else going on? Just an insight into the nitrates market, sort of now and kind of for the rest of the year would be brilliant. Thanks. Sure. I think part of it was a bit of an inventory build, although our order book like looks quite strong for nitrates where we stand today as we guided to, whether it's UAN or CAN. We've kind of had sales several months out already where we stand today. At the end of Q1, there's probably some inventory build, I think, at end of Q1 is part of it. In terms of just kind of the on the product side, we could have had a little bit more UAN versus CAN application as well. We moved to more UAN tons in Europe. I think it's both of what both of what you said there. You know, overall, we're still seeing very low, I mean, where we stand today in May, very low CAN inventories across the system. Like we just talked about in the U.S., very strong economics, extremely strong economics from a farmer perspective due to the high wheat prices. Also, CAN is much more of an on-purpose, you know, natural gas-based product when you think about that market in Western Europe and has been reliant on, you know, exports from Russia as one element and a higher marginal cost for higher European natural gas gas pricing. You know, all of those elements plus the forward selling where we stand today kind of give us, you know, good views on CAN, and we've seen, kind of, relatively good price performance measured with the higher diesel costs that we've seen and the tighter S&Ds in the market. That's great. Very helpful. Thanks so much. Our next question comes from Adrien Tamagno from Berenberg. Your line is open. Please go ahead. Hello, good afternoon. Thank you. Just to start, I would like to clarify a bit the CapEx figure. Can you confirm the $350 million-$450 million growth CapEx for next year comes on top of your $300 million or so of maintenance for 2023, and this includes all of the projects you would have in your pipeline that would be sanctioned? Just to confirm that, please. Yeah. We can confirm that that's the estimate and for the guidance. Our growth CapEx holistically for next year, the $350-$450, and that will be on top of our maintenance CapEx. I will just say, I think in terms of $350-$450, that includes previously announced projects, right? We consolidate pretty globally, as you know. That includes things like announced projects that you know about, which means that they have a higher likelihood of FID, obviously. We're looking at projects that are low-hanging fruit or have the highest return overall, while maintaining that focus on the investment-grade commitment as well as returning capital to shareholders. You know, having that type of spending profile and deploying capital to grow our business and get good returns. Okay, that's helpful. In terms of the, you know, non-controlling interest payments, I mean, you already explained well before, but in terms of the payout in cash dividend of this amount, how should we think about it? Subject to discretion? It's viable 50%, everything? Just to understand a bit better how to model this, minority cash outflow. Sorry, you're asking about the October OCI dividends? No, no. The minority leakage in terms of cash outflow. Well, in terms of the minority leakage, I mean, the most obvious one, of course, 50% of Fertiglobe is not held by OCI. So the cash leakage there takes place whenever there's dividends paid out by Fertiglobe. There's a dividend that's been paid out by Fertiglobe in Q2, and there's of course the anticipated dividends in October, which is the second sort of semi-annual installment there. I believe that Fertiglobe earlier today provided guidance that that dividend will be at minimum $700 million. In addition to that, of course, we have now the 15% minority in OCI Methanol, which is sort of an additional minority leakage that will be seen depending on. We tend to pay dividends quarterly, in that business. On top of that, of course, there is the minority interest associated or the cash leakage associated with the Sorfert dividends as well, which is sort of the next sort of significant number. Yeah. I was referring to that one in fact, and what sort of payouts should it be? Yeah. Well, for Sorfert, it's basically because based on the 2021 financial statements, you can, I think, deduce that the leakage for Sorfert dividends in 2022 attributable to 2021 net income and declared dividends is around $360 million. Thank you. That's the emanation just for Sorfert. On top of that, you will have the 50% of dividends leakage in Fertiglobe from Fertiglobe. Yeah. Yeah. I understand. Yeah. Okay. Thank you. Our next question comes from Faisal Al Azmeh from Goldman Sachs. Your line is open. Please go ahead. Yes. Hi, and thanks for the opportunity to ask questions. Just one question on my side. When looking at the European- We have lost connection with Faisal. We move on to Kenny King from JPMorgan. Your line is open. Please go ahead. Hi. Thank you for the opportunity to ask questions. Firstly, just wanna follow up on the CapEx question earlier. $350 million-$450 million growth CapEx. I just want to understand, how much of that is related to, decarbonization, and if you can actually help us to identify that. Do you have a runway, going forward, you know, for decarbonization initiatives on that? That's a very good question. I mean, this is very much in line with what we had in our ESG strategy day last year, which is, you know, we target 20% reduction in greenhouse gas intensity by 2030. That's achieved through our operational excellence program, which, as you know, is underway. It's achieved through reduction in Scope 2 by switching to renewable electricity. Another way is through low carbon growth opportunities that meet our investment thresholds. The overwhelming majority of the growth CapEx here we're talking about is decarbonization focused with a financial return and meeting those metrics. There could be some logistics here or there, something like that, on an as-needed basis. I'd say the overwhelming majority, including the ones that have been previously announced, like Project Harvest, which is a 1 million-ton blue ammonia plant in Abu Dhabi. You know, that one where we'd have a 30% stake as Fertiglobe or effectively a 15% stake as OCI and potentially have some SPV related financing on that. That's one of them. For example, the carbon sequestration project in Iowa, taking advantage of the 45Q's that we're doing with Navigator, which is a BlackRock backed entity, to sequester CO2 and generate a return and create blue ammonia in Iowa is another example of one of the ones that we've announced, which means that it's you know, much more serious on the list there. Okay. Just to also follow up on dividends. So you mentioned the expectation that's much higher than EUR 1.45 for the last half year. So, I mean, is it right to think you might want to cap it, you know, at certain amounts? I don't know if you would potentially think of that. Obviously, at this moment, you have very positive cash flow, and then you're able to pay that. In preparation for the future, if the prices goes down, you would need to put in more cash into working capital. Would you want to be more conservative paying out dividends, for example? I mean, we're constantly evaluating what is the right quantum for all sorts of capital deployment avenues, all within the framework of continuing to maintain our hardly earned investment grade status. We have announced that we will be committed to be below 2x through the cycle, which was a further sort of conservative step up in our financial policy. We are obviously cognizant of the potential growth initiatives that Ahmed described earlier. With that, we were able to identify what is a comfortable sort of dividend floor for us going forward, and that will be adjusted, of course, adjustable based on available free cash flow. This triangulation is a continuous one that we work on. We feel that based on our balance sheet situation, based on the outlook in the market, and our outlook is not necessarily just a couple of quarters out, you know, we're thinking longer horizon than that. Based on how we see the various projects evolving, we're comfortable with making that statement for the October dividend. I'll just add to that, you know, as Hassan outlined, there are many. We're looking at different opportunities across our entire asset base, leveraging existing infrastructure, synergies, things like that. It allows us to be highly opportunistic because Hassan, who's controlling the cash also within the business, you know, when we're looking at capital allocation and we want to focus on investment grade profile or investment grade, being investment grade now that we're investment grade, as well as continuing to have that dividend I think that shareholders appreciate, we're having, you know, competition for a limited amount of projects, looking for the highest return and highest bang for your buck on decarbonization as well. That we think is a very good, you know, position to be in. We recognize that we're in a volatile commodity market. As I mentioned during the prepared remarks, there are higher marginal cost floors and strong demand drivers for the next few years that give us more comfort on kind of some of the highs and lows that we see in the market. Thanks. We return to Faisal Al Azmeh from Goldman Sachs. Your line is open. Please go ahead. Yeah. Thank you. Just a question on the European methanol business or segment. When looking at the revenue figures compared to last year, it's actually quite a strong year. That's mostly coming from clean fuels, if my understanding is correct. How much of that contribution has been this quarter and when comparing it to last year, and where do you see this business getting towards over the coming years? Just so we can get a sense of the contribution from that particular part of the segment and how it has grown year-over-year and what should we expect for the remaining of this year. It has driven the profitability at the EBITDA line, so I'm assuming it is growing in terms of its importance for that segment. Thank you. Sure. I mean, Faisal, it's definitely you heard what we said at the beginning, which is that looking to be on an annualized basis, high double-digit, low triple-digit million EBITDA per year. So I think you can kind of just see where that's at. You know, we're not giving year-over-year figures, but it's been quite a significant growth. Part of the growth is also driven by the fact that, you know, you came from a 2020 low industrial demand and everything like that. This is going into fuels like low carbon methanol, MTBE. And you know, this is a second generation biofuel in many cases. We're excited about it. We're continuing to look at the ways to grow the business on an aggressive basis. We think it's a completely different pool of customers and end markets and more diversified than, you know, what we're traditionally in. We're very much excited about that business, and it's a good launching pad as we think about the hydrogen opportunity across process methanol, but also ammonia, which we see coming a little bit later. Is that, and you can replicate this, these efforts on the U.S. front as well, given your presence there. Is that something that cannot be, let's say, expanded or. Yeah. Diversified in that sense? No, I mean, actually, this is partly U.S., I mean, it's partly U.S. driven as well in terms of some of this actual supply does come from the U.S., from our methanol business in the U.S., right? Actually, you know, that's a big driver of the performance here. We're going into the European markets. I'd say that we're still scratching the surface on the opportunity for low-carbon methanol. People looking at that being an alcohol mix to decarbonize the diesel fuel or fuel market, whether it's low-carbon methanol, low-carbon MTBE. You know, these are oxygenates. They're very attractive right now, and people are looking to meet their biofuels targets. They have advantages that, you know, unlike ethanol, they're considered second generation because they're derived from waste. You know, our marketing team's pushing hard to enter into other regulatory markets globally, so we can grow that. I think it'll dovetail well into the marine fuels market for methanol and ultimately the marine fuel markets for ammonia. Okay. Thank you. Our next question comes from Lisa De Neve from Morgan Stanley. Your line is open. Please go ahead. Hi, everyone. Thank you for taking my questions. I have two. I just want to come back to the growth CapEx. There are some projects you have mentioned, sort of on the clean ammonia side and some projects in the FID stage, which are mostly in the MENA region. Are you also considering expanding your footprint in a meaningful way in the U.S., whether it's from the methanol or the nitrogen side? This is next to the projects you just mentioned with Navigator. I thought I saw some sort of filing of documents regarding OCI Beaumont, so sort of any color on that would be great. The second question is on methanol. I understand that demand for MTBE and fuel applications for methanol is very strong, especially in the light of higher miles driven. Can you share how methanol demand for formaldehyde is holding up, given we do see now a slowdown in construction and furniture markets? How is demand from MTO, in the light of renewed Chinese lockdowns holding up? Any sort of color here on how you square that with a tight supply backdrop, would be great. Thank you. Sure, Lisa. I mean, just starting with the first question. I mean, yeah, like, some of the reports that are there are not something that we kind of came out with as a number. In general, you know, we gave this growth CapEx guidance, and Hassan went through it to kind of talk about how we think about things. You know, to your question, when we look at the opportunities in the U.S., yeah, we're looking basically at almost all our sites, what makes the most sense, and looking and competing them against each other for that capital to meet the thresholds that we're looking at for decarbonization and economic returns. You know, that's one element. The other is that just because there's been some questions on IRR, well, sometimes, with some of the numbers that are out there could be scope that has nothing to do with OCI particularly or for, or includes, you know, people with a lower cost of capital, investing in it. For example, you talk about the project that was announced in Egypt, green in Egypt or in Abu Dhabi, looking at green hydrogen to green ammonia. Now, our scope of investment, even as Vertimo, will not be that significant because we have the existing ammonia plant, and we're gonna bring in electrolyzed, basically, hydrogen from water, which also has an upstream renewable electricity business that's built to support that. We're not gonna be investing in renewable electricity. That's not our bread and butter. That's not our cost of capital. We're looking for higher returns on an OCI basis and, you know, participating in that hydrogen, more on the hydrogen consumption side and going into those end markets that we've been developing that I just talked about on the question with Faisal. Did that answer your first question? Yes, yes, it helped. Yes, thank you. Helped. Okay. Your second question, MTBE. Your question was what on MTBE and methanol? The question is, I would like to get some color on methanol demand because I can understand that everything that's related to miles driven is doing very well right now. But on the other side, your MTO demand with Chinese renewed lockdowns, if you think about formaldehyde, which makes up a big share of methanol demand, we see slowdown in construction in furniture markets at this point in time. I'm just trying to circle that on how the full demand picture is looking and how we then square that with actually still quite a tight supply backdrop. I mean, specifically on the non-oil. I think, you know, we talked about kind of the oil related and then what's called the non-oil related, more GDP related methanol demand. On the oil related side, methanol, whether it's for MTO, MTBE, you know, the margins are very strong for those customers, and methanol is extremely affordable. I think we're still scratching the surface on what we can do for methanol to gasoline blending and pushing that heavily now because it's like I said, it has not looked this cheap in over a decade in terms of how methanol can be blended on as it competes with things like gasoline. On the non-oil side, GDP linked like formaldehyde, acetic acid, we're still seeing strong demand. In the U.S. Gulf, there's more kind of operational issues on acetic acid demand that's more operational rather than what we perceive to be end-market related. You know, something we continue to monitor. So far we're still seeing you know, our ability to pass on cost there. You know, when you think about methanol itself, the price actually hasn't really gone up that much. You know, when you look at something like ammonia, right? Ammonia is well over $1,000 a ton. Methanol is sitting at $325-$350 a ton. From our side, we haven't seen that kind of GDP-linked type business abate from an affordability perspective at this point. Okay, that's great. Thank you. We have no further audio questions. I'll now hand back to Hans Zayed for questions received from the webcast. Yes. Hi. We've received a few questions from Lutz at Rosenhaus to start off with. What is your target net debt to EBITDA ratio for 2022? As I mentioned earlier, we're not giving specific guidance on such metrics for the year. However, I do point to our financial policy, which says below 2x through the cycle. However, given where we are in the results and the 0.4 leverage sort of baseline we're at today, I would expect it to be significantly better than that, as we continue to experience healthy pricing above price levels, well above mid-cycle levels in the market. Okay. The next question is a market question. Do you see any signs of demand destruction because of high prices in certain regions? I give this, I guess, a general, not specific to a specific project or product, right? I mean, I think it's something that we have to always, you know, be on the lookout for. We've seen, start with kind of nitrogen then go to methanol. Actually, we just talked about methanol. On the nitrogen side, you know, melamine prices are still very strong. You know, at some point, you know, we think that they've gotten quite, you know, at over EUR 3,500 a ton. You could see some, you know, that hit against, some, you know, demand. You could start seeing some demand destruction on that point, but so far the Q2 pricing is quite strong. On the ammonia derivative side, you know, you think about caprolactam and acrylonitrile, we're seeing some kind of like some brought down consumption from like 100% to 80% in some parts of the market. There's more than enough demand to offset that, whether it's on melamine with traditional urea uses or whether it's on ammonia itself with ammonia usage, because of what we talked about earlier, which is, you know, when ammonia price dips a bit below the marginal cost for Europe, you're gonna have to import ammonia, and you're gonna have more ammonia demand. Where you have, what is it? 19 million tons worth of ammonia in Europe, 3 million tons have been taken off the market in the last six months. On annualized basis, 7 million tons. I mean, that's a pretty decent number, in terms of, you know, additional demand compensating for potential demand destruction there. When it comes to fertilizer and, you know, we see that as more inelastic overall, so there could be some reduction in demand if it doesn't come to market before the planting time. But that just means higher grain prices in the future, and it's more of a demand deferral because you still have to generate, you know, the grains and ultimately produce the calories, for global populations given how low the stock-to-use ratio is. I think the last on the nitrogen side, maybe touch upon DEF. We're still seeing very strong DEF growth. It's a bit seasonal with the driving season, but DEF continues to be quite robust. It continues to grow year over year. You're seeing as new equipment comes online, higher and higher dosing rates. We think that, you know, with the focus on smog and local solutions for NOx in particular emissions, you know, the demand outlook for DEF looks strong, not just in our traditional U.S. or, you know, the European markets. We think emerging markets will increasingly spend more time focused on getting DEF and selective catalytic reduction engines on the roads to reduce smog in major countries like Brazil, India, China, et cetera. I think we talked about methanol on the prior question from Lisa from Morgan Stanley. The next question is, what might be the impact on the Dutch plants if Russian gas supplies are stopped? I think on, you know, Russian gas comprises I think something 15%-20% of Dutch gas, in general. It's a bit of a lower percentage versus some East, more Eastern European markets. Nevertheless, I think overall for OCI, you know, a lot of our business is outside of Europe. When we've seen, our performance, whether it's Q4 or Q1 of this year, the results you saw the last two quarters, the $1.8 billion of net deleveraging and the strong EBITDA and free cash flow performance, that's all done with only one of four natural gas consuming lines running. Only one of four in Europe. We have two methanol plants that have been shut down since middle of last year, and we have one ammonia plant that's been shut down over the last couple of quarters. We're operating at very full utilization rate, and you still have that type of result out of a European operation, and then obviously outsized results out of our US and Middle Eastern operations. The one area that would probably when you think about if that happens is if you have both lines down on our Dutch facility, you may not have urea or you have to start curtailing urea. I think you have a very big problem globally, where a lot of urea production globally will be missing if European urea comes. because it comes offline in a major way because you can't compensate that, you know, by importing urea in a very tight market. Nitrates as well. This is, I mean, nitrates, which is very much supply-driven and a big part of demand in Europe, that would also be very quite disastrous. Next question is, did you participate in the recent tender? Yes, what volumes against which prices did you offer? I think that information is public in terms of what we've participated in as Fertiglobe. I think that information is public. I think pricing is actually public as well in terms of what we did. I think the pricing just came out publicly in the last few hours. What we end up deciding to participate in is more kind of a commercial strategic decision that we keep confidential before the bids come due. Next question is for Hassan, I think. Could you elaborate on the upgrade to investment grade level from all three agencies within a few days? It's a good question. It's a nice question to get. It's really a convergence of fundamentals and how they perceive the company. Of course, regularly, in our pursuit of capturing, making sure that the improvements in our balance sheets are fairly reflected. You know, after every set of results, we actively meet with the rating agencies and update them on our results and our plans. That it was no different, as a setting for sort of these reviews. We're very pleased to see that all three recognize the significant deleveraging that we were able to achieve over the past two years. Of course, seeing where we are in terms of our leverage profile right now and sitting having an undrawn $1.1 billion RCF, as well. I think we're in a pretty good place in terms of our balance sheet strength, and that's been fairly recognized by the rating agencies. Okay. What I think is the last question in our webcast session. Do you expect consolidation by merger acquisition within the sector to strengthen for future growth opportunities? I think we saw that from 15 to the 2016 to 2021 period where there was very low pricing and balance sheets were quite strained. I think that we could see overall in the market a bit of a step up if people can meet on the bid-ask spread. Just given that there could be consolidation opportunities. We're still quite a highly fragmented industry when it comes to nitrogen. You could see some. I think M&A would be satisfied to see some M&A over the coming few years given just how fragmented the industry is and has been the last decade. Our Q&A has come to an end. I'll now hand back to Ahmed El-Hoshy for closing remarks. All right. Thanks, everyone, for joining the call today. Great questions, and looking forward to our next discussion. Take care. Today's call has now concluded. 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