MOSCOW (MRC) -- Trinseo (Berwyn, Pennsylvania) reports fourth-quarter net income of USD6 million, swinging from a USD1-million loss in the year-ago period, reported Chemweek.
Adjusted EBITDA totaled USD27 million, down 47% year over year (YOY) from USD51 million, reflecting lower styrene and polycarbonate (PC) margins. Sales totaled USD889 million, down 17% YOY from USD1.065 billion, the result mainly of the pass-through of lower raw material costs, but also lower volume in the feedstocks, polystyrene, and synthetic rubber segments. Adjusted earnings per share came to 35 cents, up 52% YOY, but short of the average analyst estimate of 48 cents as compiled by Refinitiv (New York).
Frank Bozich, CEO, expects market conditions in the year ahead similar to those of the second half of 2019. "We are confident that our business excellence program, our improved cost structure from the recent restructuring, and our focus on the growth areas of our portfolio will largely offset incremental headwinds, including lower year-over-year styrene margins."
Trinseo expects 2020 net income of USD95-112 million, up from USD92 million, and adjusted earnings per share of USD2.40-2.84, down from USD3.13. The outlook assumes the 2019 novel coronavirus (2019-nCoV) outbreak will have a pretax impact of USD5-10 million. "While our operations haven’t been affected, we are seeing lower demand from our customers in China due to delayed plant start-ups following Chinese New Year," says Bozich.
Sales in the latex binders segment declined 14% YOY to USD219 million, mainly on the pass-through of lower raw material costs. Adjusted EBITDA was flat at USD22 million as unfavorable net timing was offset by higher volume to coatings, adhesives, sealants, and elastomers (CASE) applications and the contribution of the Rheinmuenster, Germany, latex binder facilities acquired from Dow in October.
Synthetic rubber segment sales declined 23% YOY to USD100 million. Trinseo cites cost pass-through and lower emulsion styrene-butadiene rubber (E-SBR) volume, partially offset by higher solution styrene-butadiene rubber (S-SBR) volume. Adjusted EBITDA doubled to USD12 million on favorable timing, higher S-SBR volume, and higher fixed-cost absorption.
Performance plastics sales dropped 10% YOY to USD325 million on cost pass-through and the weaker polycarbonate market, partially offset by higher volume, mainly into the consumer electronics market in Asia. Adjusted EBITDA came to USD29 million, down USD2 million YOY on higher fixed costs, partially offset by timing and increased volume.
Polystyrene (PS) sales dropped 26% YOY to USD176 million, mainly on styrene cost pass-through; lower volume in Europe was mostly offset by higher volume in Asia. Adjusted EBITDA dropped slightly to USD5 million.
Sales in the feedstocks segment dropped 13% YOY to USD69 million on lower styrene market prices. Adjusted EBITDA of negative USD10 million was USD3 million lower YOY on lower margins in Europe and Asia.
Americas Styrenics, the company’s joint venture with CPChem, reported adjusted EBITDA of USD21 million, down USD10 million YOY on lower styrene margin.
As MRC informed before, Trinseo have announced a price increase for all PS grades, acrylonitrile-butadiene-styrene (ABS) and acrylonitrile styrene copolymer (SAN) grades in Europe. Effective February 1, 2020, or as existing contract terms allow, the contract and spot prices for the products listed below rose as follows:
-- STYRON general purpose polystyrene grades (GPPS) -- by EUR100 per metric ton;
-- STYRON and STYRON A-Tech and STYRON X- Tech high impact polystyrene grades (HIPS) - by EUR100 per metric ton;
- MAGNUM ABS resins - by EUR55 per metric ton;
- TYRIL SAN resins - by EUR55 per metric ton.
According to MRC's ScanPlast report, Russia's estimated consumption of PS and styrene plastics was 46,260 tonnes in December 2019, up by 8% year on year. The estimated consumption of PS and styrene plastics totalled 500,660 tonnes in 2019, down by 1% year on year. Russian producers of PS and styrene plastics produced 44,960 tonnes of material in December 2019, up by 1% year on year.
Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD4.6 billion in net sales in 2018, with 16 manufacturing sites around the world, and approximately 2,500 employees.
MRC