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Eastman Chemical to cut 2020 capex by 24%

March 26/2020

MOSCOW (MRC) -- Eastman Chemical will reduce planned 2020 capital spending to USD325M-USD375M, a 24% reduction at the midpoint from the previous expectation of USD450M-USD475M, which it says will provide a strong foundation during the coronavirus, reported Seeking Alpha.

The company expects Q1 earnings to come in above the prior year period and above previous expectations, and sees breakeven free cash flow for Q1, which it says is well above typical Q1 free cash flow in prior years.

Eastman says its balance sheet is "solid" with no long-term debt maturities in 2020 and a "manageable" amount of debt due in 2021; it expects to reduce debt by more than $400M in 2020 by retiring certain existing borrowings.

Separately, Citi upgraded Eastman shares to Buy from Hold.

As MRC reported earlier, in 2016, Eastman Chemical's chief executive Mark Costa announced that the company  wanted to reduce its surplus ethylene and commodity intermediates, but did not intend to sell its cracker in Longview, Texas.

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).

Eastman is a global specialty chemical company that produces a broad range of products found in items people use every day. With a portfolio of specialty businesses, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. Its market-driven approaches take advantage of world-class technology platforms and leading positions in attractive end-markets such as transportation, building and construction and consumables. Eastman focuses on creating consistent, superior value for all stakeholders. As a globally diverse company, Eastman serves customers in approximately 100 countries. The company is headquartered in Kingsport, Tennessee, USA and employs approximately 15,000 people around the world.
Author:Margaret Volkova
Tags:PP, PE, LLDPE, homopolymer PP, propylene, HDPE, ethylene, petrochemistry, Eastman Chemical, Russia, USA.
Category:General News
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