August 2, 2022

Covestro Q2 Results

Germany’s Covestro Q2 net income falls sharply amid higher feedstock, energy prices

Author: Nurluqman Suratman

2022/08/02

SINGAPORE (ICIS)–Covestro’s second-quarter net income fell by 55.7% after earnings were hit by higher raw material and energy prices, the German chemicals major said on Tuesday.

– Q2 group sales were supported by higher average selling prices.
– Q2 EBITDA losses due to higher feedstock and energy prices were partially offset by a higher selling price level.

OUTLOOK

Covestro last week adjusted its outlook for the year as a result of recent significant further increase in energy costs and a further weakening of the global economy.

“In this second half of the year, the macroeconomic risks have once again increased significantly, particularly with regard to the very high energy costs and uncertainties in gas supply at our German sites,” said Thomas Toepfer, the CFO of Covestro.

The company is initiating various measures to reduce its gas requirements in Germany in the short term, such as by switching to oil-based steam generators.

Covestro is also “continuously working to improve existing production technologies and roll out new ones in order to further reduce gas and
energy consumption”.

“If gas supplies are rationed in the further course of the year, this could result in partial load operation or a complete shutdown of individual Covestro production facilities, depending on the level of the cutback,” it said.

“Due to the close links between the chemical industry and downstream sectors, a further deterioration of the situation is likely to result in the collapse of entire supply and production chains,” Covestro added

https://www.icis.com/explore/kr/resources/news/2022/08/02/10790976/germany-s-covestro-q2-net-income-falls-sharply-amid-higher-feedstock-energy-prices

August 2, 2022

Covestro Q2 Results

Germany’s Covestro Q2 net income falls sharply amid higher feedstock, energy prices

Author: Nurluqman Suratman

2022/08/02

SINGAPORE (ICIS)–Covestro’s second-quarter net income fell by 55.7% after earnings were hit by higher raw material and energy prices, the German chemicals major said on Tuesday.

– Q2 group sales were supported by higher average selling prices.
– Q2 EBITDA losses due to higher feedstock and energy prices were partially offset by a higher selling price level.

OUTLOOK

Covestro last week adjusted its outlook for the year as a result of recent significant further increase in energy costs and a further weakening of the global economy.

“In this second half of the year, the macroeconomic risks have once again increased significantly, particularly with regard to the very high energy costs and uncertainties in gas supply at our German sites,” said Thomas Toepfer, the CFO of Covestro.

The company is initiating various measures to reduce its gas requirements in Germany in the short term, such as by switching to oil-based steam generators.

Covestro is also “continuously working to improve existing production technologies and roll out new ones in order to further reduce gas and
energy consumption”.

“If gas supplies are rationed in the further course of the year, this could result in partial load operation or a complete shutdown of individual Covestro production facilities, depending on the level of the cutback,” it said.

“Due to the close links between the chemical industry and downstream sectors, a further deterioration of the situation is likely to result in the collapse of entire supply and production chains,” Covestro added

https://www.icis.com/explore/kr/resources/news/2022/08/02/10790976/germany-s-covestro-q2-net-income-falls-sharply-amid-higher-feedstock-energy-prices

August 2, 2022

Huntsman Q2 Results

Huntsman Announces Second Quarter 2022 Earnings; $501 million of Buybacks in First Half of 2022

Download as PDF August 02, 2022 6:00am EDT

Related Documents

Audio Earnings WebcastEarnings Slides PDF

Second Quarter Highlights

• Second quarter 2022 net income of $242 million compared to net income of $172 million in the prior year period; second quarter 2022 diluted earnings per share of $1.10 compared to diluted earnings per share of $0.70 in the prior year period.
• Second quarter 2022 adjusted net income of $265 million compared to adjusted net income of $191 million in the prior year period; second quarter 2022 adjusted diluted earnings per share of $1.28 compared to adjusted diluted earnings per share of $0.86 in the prior year period.
• Second quarter 2022 adjusted EBITDA of $432 million compared to adjusted EBITDA of $334 million in the prior year period.
• Second quarter 2022 net cash provided by operating activities from continuing operations was $231 million. Free cash flow from continuing operations was $162 million for the second quarter 2022 compared to an outflow of $83 million in the prior year period.
• Repurchased approximately 8.4 million shares for approximately $291 million in the second quarter 2022.

THE WOODLANDS, Texas, Aug. 2, 2022 /PRNewswire/ —

Huntsman Corporation (NYSE: HUN) today reported second quarter 2022 results with revenues of $2,362 million, net income of $242 million, adjusted net income of $265 million and adjusted EBITDA of $432 million. 

Peter R. Huntsman, Chairman, President, and CEO, commented:

“Second quarter EBITDA margins exceeded 18% on the back of our value over volume strategy, improved pricing, and solid cost control.  We remain well ahead or on track to meet the targets that we presented at our Investor Day in November 2021, despite an increasingly challenging economic environment due to extremely high European natural gas prices, headwinds in China associated with government-mandated shutdowns and monetary tightening in the United States. In addition to the positive results, we repurchased approximately $500 million in shares in the first six months of the year and our balance sheet remains extremely strong with a net leverage ratio of 0.6x.

“Regardless of any macro headwinds that may impact the chemical industry in the coming quarters, our priorities around cost control, a focus on downstream businesses and returning capital to shareholders will remain unchanged.  Our balance sheet and cash generation places us in an enviable position to take advantage of opportunities as they present themselves to invest in our core businesses.” Segment Analysis for 2Q22 Compared to 2Q21

Polyurethanes

The increase in revenues in our Polyurethanes segment for the three months ended June 30, 2022 compared to the same period of 2021 was primarily due to higher MDI average selling prices, partially offset by lower sales volumes. MDI average selling prices increased in all our regions. Sales volumes decreased primarily due to the extended government-mandated COVID lockdown in Shanghai, China and lower demand, partially offset by favorable comparisons in Europe due to the scheduled turnaround at our Rotterdam, Netherlands facility in the second quarter of 2021. The increase in segment adjusted EBITDA was primarily due to higher MDI margins and a gain from an insurance settlement, partially offset by lower sales volumes, the negative impact of weaker major international currencies against the U.S. dollar and lower equity earnings from our minority-owned joint venture in China.

Advanced Materials

The increase in revenues in our Advanced Materials segment for the three months ended June 30, 2022 compared to the same period of 2021 was primarily due to higher average selling prices, partially offset by lower sales volumes. Average selling prices increased largely in response to higher raw material, energy and logistics costs as well as improved sales mix. Sales volumes decreased primarily due to deselection of lower margin base resins business. The increase in segment adjusted EBITDA was primarily due to higher sales prices and improved sales mix.

https://www.huntsman.com/news/media-releases/detail/534/huntsman-announces-second-quarter-2022-earnings-501

August 2, 2022

Huntsman Q2 Results

Huntsman Announces Second Quarter 2022 Earnings; $501 million of Buybacks in First Half of 2022

Download as PDF August 02, 2022 6:00am EDT

Related Documents

Audio Earnings WebcastEarnings Slides PDF

Second Quarter Highlights

• Second quarter 2022 net income of $242 million compared to net income of $172 million in the prior year period; second quarter 2022 diluted earnings per share of $1.10 compared to diluted earnings per share of $0.70 in the prior year period.
• Second quarter 2022 adjusted net income of $265 million compared to adjusted net income of $191 million in the prior year period; second quarter 2022 adjusted diluted earnings per share of $1.28 compared to adjusted diluted earnings per share of $0.86 in the prior year period.
• Second quarter 2022 adjusted EBITDA of $432 million compared to adjusted EBITDA of $334 million in the prior year period.
• Second quarter 2022 net cash provided by operating activities from continuing operations was $231 million. Free cash flow from continuing operations was $162 million for the second quarter 2022 compared to an outflow of $83 million in the prior year period.
• Repurchased approximately 8.4 million shares for approximately $291 million in the second quarter 2022.

THE WOODLANDS, Texas, Aug. 2, 2022 /PRNewswire/ —

Huntsman Corporation (NYSE: HUN) today reported second quarter 2022 results with revenues of $2,362 million, net income of $242 million, adjusted net income of $265 million and adjusted EBITDA of $432 million. 

Peter R. Huntsman, Chairman, President, and CEO, commented:

“Second quarter EBITDA margins exceeded 18% on the back of our value over volume strategy, improved pricing, and solid cost control.  We remain well ahead or on track to meet the targets that we presented at our Investor Day in November 2021, despite an increasingly challenging economic environment due to extremely high European natural gas prices, headwinds in China associated with government-mandated shutdowns and monetary tightening in the United States. In addition to the positive results, we repurchased approximately $500 million in shares in the first six months of the year and our balance sheet remains extremely strong with a net leverage ratio of 0.6x.

“Regardless of any macro headwinds that may impact the chemical industry in the coming quarters, our priorities around cost control, a focus on downstream businesses and returning capital to shareholders will remain unchanged.  Our balance sheet and cash generation places us in an enviable position to take advantage of opportunities as they present themselves to invest in our core businesses.” Segment Analysis for 2Q22 Compared to 2Q21

Polyurethanes

The increase in revenues in our Polyurethanes segment for the three months ended June 30, 2022 compared to the same period of 2021 was primarily due to higher MDI average selling prices, partially offset by lower sales volumes. MDI average selling prices increased in all our regions. Sales volumes decreased primarily due to the extended government-mandated COVID lockdown in Shanghai, China and lower demand, partially offset by favorable comparisons in Europe due to the scheduled turnaround at our Rotterdam, Netherlands facility in the second quarter of 2021. The increase in segment adjusted EBITDA was primarily due to higher MDI margins and a gain from an insurance settlement, partially offset by lower sales volumes, the negative impact of weaker major international currencies against the U.S. dollar and lower equity earnings from our minority-owned joint venture in China.

Advanced Materials

The increase in revenues in our Advanced Materials segment for the three months ended June 30, 2022 compared to the same period of 2021 was primarily due to higher average selling prices, partially offset by lower sales volumes. Average selling prices increased largely in response to higher raw material, energy and logistics costs as well as improved sales mix. Sales volumes decreased primarily due to deselection of lower margin base resins business. The increase in segment adjusted EBITDA was primarily due to higher sales prices and improved sales mix.

https://www.huntsman.com/news/media-releases/detail/534/huntsman-announces-second-quarter-2022-earnings-501

August 1, 2022

LyondellBasell Propylene Oxide Update

LyondellBasell Industries Q2 2022 Earnings Call Transcript

Fri., July 29, 2022 | AlphaStreet Share (Ad)
Listen to Conference CallView Latest SEC 10-Q Filing

Participants

Corporate Executives

• David KinneyHead of Investor Relations
• Peter VanackerChief Executive Officer
• Michael McMurrayChief Financial Officer
• Kenneth (Ken) LaneExecutive Vice President, Global Olefins & Polyolefins (O&P)
• Torkel RhenmanExecutive Vice President, Intermediates and Derivatives, and Refining
• James GuilfoyleExecutive Vice President, Advanced Polymer Solutions & Global Supply Chain

Torkel Rhenman

Executive Vice President, Intermediates and Derivatives, and Refining at LyondellBasell Industries

Thank you, Ken. Please turn to Slide 14 as we take a look at our Intermediates & Derivatives segment. Exceptional Oxyfuels margins resulted in record second quarter segment EBITDA of $675 million. During the quarter styrene results benefited from tight market supply. We are beginning to see that softer demand for durable goods is leading to moderation in propylene oxide margins.

In the third quarter we expect margin compression across most product lines. Oxyfuels margins are also moderating but expected to remain elevated at levels well above historical averages. The steady success of our Intermediates & Derivatives Segments is rooted in the advantaged technologies, underpinning our propylene oxide business.

On Slide 15, let me highlight the cost advantages of LyondellBasell’s propylene oxide production. The chart on the right depicts the global cost curve for producing propylene oxide by asset. The lower an asset is positioned on the curve, the greater the cost advantage. As you can see, LyondellBasell’s assets that produce propylene oxide with a tertiarybutyl alcohol co product are on the lowest or most favorable part of the cost curve. PO/TBA assets represent roughly 50% of global capacity and derive their advantage from favorable cost for butane, raw materials and strong pricing for the clean burning high octane Oxyfuels products produced from tertiarybutyl alcohol.

LyondellBasell’s plants that produce propylene oxide with the styrene monomer co products are the next lowest cost technology and represent 35% share of global capacity. Much of the industry produces propylene oxide using older, higher cost technologies such as the chlorohydrin process. With the recent escalation in chlorine prices, the cost chlorohydrin based propylene oxide has only steepened, creating hardships for producers using this technology.

LyondellBasell’s advantage PO/TBA technology provides an excellent platform to address increasing global demand for propylene oxide and Oxyfuels. Propylene oxide is used in the production of polyurethanes, versatile materials that saves energy by producing insulation and reducing weight in a wide range of applications. Oxyfuels are clean burning, high-octane gasoline blending components that increase fuel efficiencies and improves air quality by reducing harmful emissions.

Let’s continue with Slide 16 with an update on our PO/TBA project that we are completing here in Houston. This is the largest greenfield investment in LyondellBasell’s history and will deliver much needed capacity to serve growing demand for these products that provide sustainable solutions for our planet. We are thrilled to have nearly completed construction and we have already begun commissioning the Oxyfuels assets depicted in the photo on the right.

The PO/TBA plant commissioning will begin during the fourth quarter and we expect the integrated facility to start up in the first quarter of 2023. Our ramp up during 2023 will not provide for full year of production, but continued market strength is likely to support stronger margins than the mid-cycle economics depicted on this line. With LyondellBasell’s advantaged technology and affordable shale advantaged butane feedstocks, our new capacity’s starting up with the support of favorable markets.

Now, let’s turn to Slide 17 and discuss the results for our Refining segment. Second quarter EBITDA was $418 million with improved margins driven by increased demand for gasoline, diesel and jet fuel. In the second quarter, the Maya 2-1-1 spread expanded significantly to about $56 per barrel. We operated the refinery at 94% of capacity, with an average crude throughput of 52,000 barrels per day. In the near term, the Maya 2-1-1 spread is moderating from second quarter levels. We plan to run the refinery above 87% of capacity during the third quarter to perform a limited scope of planned maintenance.

Stephen Byrne Analyst at Bank of America Merrill Lynch

Okay. Yes, thank you. I appreciate the Slide 15 on your outlook for PO. And Torkel, maybe you could comment on what do you think that slide would have looked like historically? Clearly, now you have some reasons for it to be shaped like that with a lower butane and higher ethyl benzene and certainly higher chlorine, but is part of this just because TBA is so valuable right now and is this — is the shape of this your outlook in the years to come, is that part of your EBITDA forecast?

Torkel Rhenman Executive Vice President, Intermediates and Derivatives, and Refining at LyondellBasell Industries

So, hi, thank you for the question. I think as we looked at this, we’ve — and if you compare it to historical averages, it’s actually widened in terms of the differential in terms of our competitive advantage. And that’s primarily driven — right now the value of the co products, and of course that will fluctuate over the cycle, but fundamentally we see for the next — where we are right now and in the coming next two years, we are in a very favorable cycle situation.

Then as you drive — if you look at energy cost going up, that will also favor our technology. So I think fundamentally, where we are and looking at it right now, I think our technology is very advantaged.

Kevin McCarthy Analyst at Vertical Research Partners

Yes, good morning. Question for Ken, perhaps, I was wondering if you could comment on the U.S. propylene market. It seems to have gotten a bit sloppy here in recent months. I believe the U.S. July contract price declined another $0.04 earlier this week, and it makes four consecutive monthly declines of 35% negative or so. Can you comment on both sides, supply/demand, what you’re seeing there and whether we might expect that pattern to reverse in coming months?Kenneth (Ken) LaneExecutive Vice President, Global Olefins & Polyolefins (O&P) at LyondellBasell Industries

Sure. Kevin, thank you for the question. Yes, I do see — expect to see that trend in propylene reverse in the U.S. In fact, I would — I think we’re going to see that in August, already. We’re starting to see spot prices move up again for propylene. And I’ll go back to the answer that I gave earlier, there’s been a lot of downtime for polypropylene assets in the U.S. and that’s put some length into the propylene market. What’s happening now is you’re starting to see those assets run again and you’re going to start to see people refilling inventory levels because of all the downtime that we’ve had with polypropylene. And that’s going to start to bring the propylene price back up a little bit here in the back-half of the year.

John Roberts Analyst at Credit Suisse

Thank you. In the presentation, you talked about continued strength in propylene oxide, but I think the release discussed some slowing in polyurethane markets, which I guess we’d expect with auto and appliances and construction. As you begin commissioning the new PO plant, do you plan to take downtime in other plants to kind of keep the market balanced if we are facing a slowdown there?Torkel RhenmanExecutive Vice President, Intermediates and Derivatives, and Refining at LyondellBasell Industries

As part of our start-up plan, we have other outages scheduled for other plants that we have delayed in terms of managing our supply on the PO. But we also expect that the plan to ramp up during the year. And we expect that for next year, we will produce about 50% of the annualized capacity from the plant.Peter VanackerChief Executive Officer at LyondellBasell Industries

Yes, John, start-up is scheduled towards the end of Q1, 2023. And I said by Torkel then, you’ll gradually move into the nameplate capacity volumes. So therefore, if you average it out over the year 2023, then it would be approximately, we expect, 50% of the nameplate capacity.

https://www.marketbeat.com/earnings/transcripts/77941/