MOSCOW (MRC) -- Huntsman reports fourth-quarter net income of USD308 million, swinging from a loss of USD315 million in the year-ago period, according to Chemweek.
Adjusted net income came to USD65 million, down 28% year over year (YOY) from USD90 million. Sales totaled USD1.657 billion, down 9% YOY from USD1.821 billion. Volume declined in all segments except polyurethanes, while pricing declined in all segments except advanced materials.
Adjusted earnings per share of 29 cents/share matched the average analyst estimate as compiled by Refinitiv (New York).
"Heading into 2020 we remain focused on what we can control, which will include investing both organically and through acquisitions into our downstream and specialty platforms, and being balanced in our approach to capital allocation, including maintaining a competitive dividend and ongoing opportunistic share repurchases,” says Peter R. Huntsman, chairman, president, and CEO.
Huntsman expects continued demand headwinds for polyurethanes, but growth in insulation, particularly spray foams. Industrial markets for advanced materials will remain weak. In the performance products segment, amines volumes will continue to grow, although demand for maleic acid will remain soft. The company also expects stable volume in textile effects, with continued growth for specialty products.
The polyurethanes segment recorded revenue of USD980 million, down 3% YOY, and adjusted EBITDA of USD122 million, down 13%. Lower average selling prices for methylene di-para-phenylene isocyanate (MDI), mainly in China and Europe, were partially offset by higher volumes in most major markets.
Revenue in performance products totaled USD278 million, down 10% YOY, and adjusted EBITDA was USD43 million, up 10%. Weaker market conditions pulled down both sales volumes and average selling prices, which also reflected lower raw material costs. Profitability increased owing to lower fixed costs and the acquisition of Sasol’s half of their German maleic anhydride joint venture.
The advanced materials segment reported revenue of USD241 million, down 9% YOY, and adjusted EBITDA of USD42 million, down 13%. The economic slowdown and customer destocking pulled down volumes in most markets, says Huntsman. Average selling prices were stable locally, but the US dollar was stronger YOY.
Revenue in the textile effects segment declined 7% YOY to USD180 million, and adjusted EBITDA declined 14% to USD18 million. Volume declined as trade uncertainty cut into demand, says the company, and average selling price declined in line with market prices.
As MRC reported earlier, in January 2020, Indorama Ventures Public Company Limited (IVL), a global chemical producer, completed its acquisition of Huntsman’s world-class integrated oxides and derivative businesses, including a large flagship site on the US Gulf Coast (USGC) at Port Neches, as well as Chocolate Bayou and Dayton in Texas, Ankleshwar in India, and Botany in Australia, as per IVL's press release.
The acquisition is a profitable and growing end applications business along with unique products and geographical profile among the crowded olefins space. It has a well-integrated assets base with an extensive infrastructure and future expansion possibilities. The area is adjacent to many USGC feedstock suppliers. The cash value of USD2.0 billion makes it the largest acquisition by Indorama Ventures ever and now our capital employed is nicely spread over plastic, chemicals and fibers. The transaction value translates to an EV/EBITDA of ~5.7x and is expected to add substantial synergies to Indorama’s existing 450kta Ethane/Propane Cracker and our 550kta EO/EG. IVL will now be integrated from Ethane to PET as well as the high-margin EO and PO derivative businesses.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated and specialty chemicals with 2017 revenues of more than USD8 billion. Its chemical products number in the thousands and are sold worldwide to manufacturers serving a broad and diverse range of consumer and industrial end markets. The company operate more than 75 manufacturing, R&D and operations facilities in approximately 30 countries and employ approximately 10,000 associates within its four distinct business divisions.
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