Company News
October 29, 2020
Huntsman Q3 Results
Huntsman Announces Third Quarter 2020 Earnings; Solid Recovery Trends in Core Markets
THE WOODLANDS, Texas, Oct. 29, 2020 /PRNewswire/ —
Third Quarter Highlights
- Third quarter 2020 net income of $57 million compared to net income of $41 million in the prior year period; third quarter 2020 diluted earnings per share of $0.22 compared to diluted earnings per share of $0.13 in the prior year period.
- Third quarter 2020 adjusted net income of $70 million compared to adjusted net income of $95 million in the prior year period; third quarter 2020 adjusted diluted earnings per share of $0.32 compared to adjusted diluted earnings per share of $0.41 in the prior year period.
- Third quarter 2020 adjusted EBITDA of $188 million compared to $215 million in the prior year period.
- Third quarter 2020 net cash provided by operating activities from continuing operations was $65 million. Free cash flow from continuing operations was $11 million for the third quarter 2020 and adjusted free cash flow from continuing operations was $189 million.
- Balance sheet remains strong with a net leverage of 1.6x and total liquidity is approximately $2.5 billion.
- Sale of Venator Materials PLC shares to funds advised by SK Capital is on track to close near year end. Together with estimated cash tax savings of approximately $150 million, which this transaction facilitates, we expect to secure an aggregate total cash benefit of approximately $250 million.
- In excess of $100 million of previously announced targeted annualized savings and acquisition integration synergies remains on track to be achieved by the end of 2021.
- On October 28, 2020, Huntsman announced the agreement to sell its India based Do-It-Yourself consumer adhesives business for up to $285 million to Pidilite Industries Ltd. The transaction value represents a 2019 adjusted EBITDA multiple of ~15x and is expected to close within the coming week.
Huntsman Corporation (NYSE: HUN) today reported third quarter 2020 results with revenues of $1,510 million, net income of $57 million, adjusted net income of $70 million and adjusted EBITDA of $188 million.
Peter R. Huntsman, Chairman, President and CEO, commented:
“The third quarter proved to be better than we had anticipated with improving conditions in almost all of our businesses except for commercial aircraft. Although the global community continues to face significant challenges around COVID-19, we see positive momentum entering the fourth quarter. We remain fully on track in integrating our two downstream acquisitions completed earlier this year and in delivering in excess of $100 million of annualized synergies and savings from our previously announced cost optimization initiative by the end of 2021. We are also on track to close on the sale of our Venator shares near the end of 2020 further bolstering our liquidity and balance sheet with approximately $250 million of total related cash. During 2020, a year that history will remember for unprecedented challenges, more than ever before Huntsman has become significantly stronger, further focused on strategically growing its differentiated businesses and enhancing shareholder value.”
Segment Analysis for 3Q20 Compared to 3Q19
Polyurethanes
The decrease in revenues in our Polyurethanes segment for the three months ended September 30, 2020 compared to the same period of 2019 was primarily due to lower MDI average selling prices. MDI average selling prices decreased across most major markets in relation to the global economic slowdown resulting from the COVID-19 pandemic. Overall polyurethanes sales volumes were roughly flat, when including sales volumes in connection with the Icynene-Lapolla Acquisition. The increase in segment adjusted EBITDA was primarily due to lower raw material costs and lower fixed costs as well as additional sales volumes in connection with the Icynene-Lapolla Acquisition, partially offset by lower MDI pricing.
October 29, 2020
Huntsman Q3 Results
Huntsman Announces Third Quarter 2020 Earnings; Solid Recovery Trends in Core Markets
THE WOODLANDS, Texas, Oct. 29, 2020 /PRNewswire/ —
Third Quarter Highlights
- Third quarter 2020 net income of $57 million compared to net income of $41 million in the prior year period; third quarter 2020 diluted earnings per share of $0.22 compared to diluted earnings per share of $0.13 in the prior year period.
- Third quarter 2020 adjusted net income of $70 million compared to adjusted net income of $95 million in the prior year period; third quarter 2020 adjusted diluted earnings per share of $0.32 compared to adjusted diluted earnings per share of $0.41 in the prior year period.
- Third quarter 2020 adjusted EBITDA of $188 million compared to $215 million in the prior year period.
- Third quarter 2020 net cash provided by operating activities from continuing operations was $65 million. Free cash flow from continuing operations was $11 million for the third quarter 2020 and adjusted free cash flow from continuing operations was $189 million.
- Balance sheet remains strong with a net leverage of 1.6x and total liquidity is approximately $2.5 billion.
- Sale of Venator Materials PLC shares to funds advised by SK Capital is on track to close near year end. Together with estimated cash tax savings of approximately $150 million, which this transaction facilitates, we expect to secure an aggregate total cash benefit of approximately $250 million.
- In excess of $100 million of previously announced targeted annualized savings and acquisition integration synergies remains on track to be achieved by the end of 2021.
- On October 28, 2020, Huntsman announced the agreement to sell its India based Do-It-Yourself consumer adhesives business for up to $285 million to Pidilite Industries Ltd. The transaction value represents a 2019 adjusted EBITDA multiple of ~15x and is expected to close within the coming week.
Huntsman Corporation (NYSE: HUN) today reported third quarter 2020 results with revenues of $1,510 million, net income of $57 million, adjusted net income of $70 million and adjusted EBITDA of $188 million.
Peter R. Huntsman, Chairman, President and CEO, commented:
“The third quarter proved to be better than we had anticipated with improving conditions in almost all of our businesses except for commercial aircraft. Although the global community continues to face significant challenges around COVID-19, we see positive momentum entering the fourth quarter. We remain fully on track in integrating our two downstream acquisitions completed earlier this year and in delivering in excess of $100 million of annualized synergies and savings from our previously announced cost optimization initiative by the end of 2021. We are also on track to close on the sale of our Venator shares near the end of 2020 further bolstering our liquidity and balance sheet with approximately $250 million of total related cash. During 2020, a year that history will remember for unprecedented challenges, more than ever before Huntsman has become significantly stronger, further focused on strategically growing its differentiated businesses and enhancing shareholder value.”
Segment Analysis for 3Q20 Compared to 3Q19
Polyurethanes
The decrease in revenues in our Polyurethanes segment for the three months ended September 30, 2020 compared to the same period of 2019 was primarily due to lower MDI average selling prices. MDI average selling prices decreased across most major markets in relation to the global economic slowdown resulting from the COVID-19 pandemic. Overall polyurethanes sales volumes were roughly flat, when including sales volumes in connection with the Icynene-Lapolla Acquisition. The increase in segment adjusted EBITDA was primarily due to lower raw material costs and lower fixed costs as well as additional sales volumes in connection with the Icynene-Lapolla Acquisition, partially offset by lower MDI pricing.
October 29, 2020
BASF Investors’ Call Highlights
Martin Brudermuller
Good morning, ladies and gentlemen, and thank you for joining us. We hope you and your families are doing well.
During the last couple of weeks, we have seen how difficult it is to contain the pandemic as the spread of the virus is sharply increasing again in many countries worldwide. At BASF, we are doing everything we can to work safely in this environment. We have reintroduced stricter measures that were no longer necessary during the summer months, but now they are advisable again.
On October 9, BASF released preliminary figures for the third quarter of 2020 and published an outlook for the full year 2020. Today, we will provide you with further details.
To begin with, let’s turn to the macroeconomic environment. The indicators for Q3 2020 are estimates as most countries have not yet published their figures for the quarter. Overall, the macroeconomic indicators improved in Q3 2020 compared with Q2 2020. However, the future macroeconomic development remains very uncertain.
According to the preliminary data, global chemical production was slightly positive in Q3 2020 compared with the prior year quarter. The resilience of chemical demand in some highly relevant customer industries is one reason for that. Another reason is China. The country continues its V-shaped recovery. Regarding the development in other regions, the bottom seems to have been reached and a gradual recovery is occurring.
Global GDP and global industrial production declined by 4.3% and 3.0%, respectively, compared with the prior year quarter. Global automotive production was still around 2% below the prior year quarter. For the full year 2020, we now expect light vehicle production to decline by around 20%, while we previously had assumed a decline of 27%.
On this slide, you can see how regional macroeconomic developments are reflected in our volume growth by region. Overall, BASF Group sales volumes were 2% lower in Q3 2020 compared with Q3 2019. This was driven by lower volumes in July and August, while we achieved a 4% volume increase in September 2020 compared with September 2019.
In Europe, volume growth improved in the course of the quarter and turned positive in September. In the U.S., volume growth compared with the prior year months remained negative due to the outage of the steam cracker in Port Arthur, Texas. Excluding this effect, volumes in the U.S. would also have turned positive in September. In the meantime, the Port Arthur cracker is back on stream.
In contrast, we recorded double-digit volume growth in Greater China across almost all segments over all 3 months in Q3 2020. We continue to benefit from our strong position in China. The planned new for Verbund site in Guangdong province will further increase our presence and customer proximity in the dynamically growing Chinese market.
This graph shows the gap between average daily order entries in April to September compared with the prior year months, that it is slowly narrowing. A look at the October month-to-date figures reveals that daily orders are still slightly below the prior year month. The recent worsening of the infection situation worldwide is jeopardizing this development and might again negatively impact our order entry in the coming months.
As in the prior quarters, customers remain very cautious and are ordering lower volumes more frequently. About 50% of our orders on hand across BASF are booked during the next month. Another 30% of all orders have a delivery date in the month after that. This means that 80% of all our orders on hand will be booked within the next 2 months, and we continue to have no clear view beyond that.
Let us now turn to the volume development by segment. Compared with the prior year’s quarter, sales volume declined by 2% on BASF Group level. This volume decline was mainly driven by the Chemicals segment. Here, the cracker outage in Port Arthur burdened the volumes development. On a BASF Group level, the cracker outage had a negative volume effect of around 1% in Q3 2020. It thus accounted for half of the decline.
In the Materials and Industrial Solutions segment, we also recorded lower volumes, mainly due to lower demand from the automotive industry. In Other, volumes declined on account of lower raw material trading activities.
In the Materials segment, EBIT before special items decreased considerably due to lower earnings in the Monomers division. Lower volumes and prices for polyamides were the main reason for this decline. Higher isocyanate margins due to lower raw material prices and increased MDI volumes could only partially offset this.
October 29, 2020
BASF Investors’ Call Highlights
Martin Brudermuller
Good morning, ladies and gentlemen, and thank you for joining us. We hope you and your families are doing well.
During the last couple of weeks, we have seen how difficult it is to contain the pandemic as the spread of the virus is sharply increasing again in many countries worldwide. At BASF, we are doing everything we can to work safely in this environment. We have reintroduced stricter measures that were no longer necessary during the summer months, but now they are advisable again.
On October 9, BASF released preliminary figures for the third quarter of 2020 and published an outlook for the full year 2020. Today, we will provide you with further details.
To begin with, let’s turn to the macroeconomic environment. The indicators for Q3 2020 are estimates as most countries have not yet published their figures for the quarter. Overall, the macroeconomic indicators improved in Q3 2020 compared with Q2 2020. However, the future macroeconomic development remains very uncertain.
According to the preliminary data, global chemical production was slightly positive in Q3 2020 compared with the prior year quarter. The resilience of chemical demand in some highly relevant customer industries is one reason for that. Another reason is China. The country continues its V-shaped recovery. Regarding the development in other regions, the bottom seems to have been reached and a gradual recovery is occurring.
Global GDP and global industrial production declined by 4.3% and 3.0%, respectively, compared with the prior year quarter. Global automotive production was still around 2% below the prior year quarter. For the full year 2020, we now expect light vehicle production to decline by around 20%, while we previously had assumed a decline of 27%.
On this slide, you can see how regional macroeconomic developments are reflected in our volume growth by region. Overall, BASF Group sales volumes were 2% lower in Q3 2020 compared with Q3 2019. This was driven by lower volumes in July and August, while we achieved a 4% volume increase in September 2020 compared with September 2019.
In Europe, volume growth improved in the course of the quarter and turned positive in September. In the U.S., volume growth compared with the prior year months remained negative due to the outage of the steam cracker in Port Arthur, Texas. Excluding this effect, volumes in the U.S. would also have turned positive in September. In the meantime, the Port Arthur cracker is back on stream.
In contrast, we recorded double-digit volume growth in Greater China across almost all segments over all 3 months in Q3 2020. We continue to benefit from our strong position in China. The planned new for Verbund site in Guangdong province will further increase our presence and customer proximity in the dynamically growing Chinese market.
This graph shows the gap between average daily order entries in April to September compared with the prior year months, that it is slowly narrowing. A look at the October month-to-date figures reveals that daily orders are still slightly below the prior year month. The recent worsening of the infection situation worldwide is jeopardizing this development and might again negatively impact our order entry in the coming months.
As in the prior quarters, customers remain very cautious and are ordering lower volumes more frequently. About 50% of our orders on hand across BASF are booked during the next month. Another 30% of all orders have a delivery date in the month after that. This means that 80% of all our orders on hand will be booked within the next 2 months, and we continue to have no clear view beyond that.
Let us now turn to the volume development by segment. Compared with the prior year’s quarter, sales volume declined by 2% on BASF Group level. This volume decline was mainly driven by the Chemicals segment. Here, the cracker outage in Port Arthur burdened the volumes development. On a BASF Group level, the cracker outage had a negative volume effect of around 1% in Q3 2020. It thus accounted for half of the decline.
In the Materials and Industrial Solutions segment, we also recorded lower volumes, mainly due to lower demand from the automotive industry. In Other, volumes declined on account of lower raw material trading activities.
In the Materials segment, EBIT before special items decreased considerably due to lower earnings in the Monomers division. Lower volumes and prices for polyamides were the main reason for this decline. Higher isocyanate margins due to lower raw material prices and increased MDI volumes could only partially offset this.
October 28, 2020
Huntsman Sells Indian Adhesives Business
Huntsman sells India DIY consumer adhesives business in $285M deal
Oct. 28, 2020 4:21 PM ET|About: Huntsman Corporation (HUN)|By: Carl Surran, SA News Editor
Huntsman (NYSE:HUN) agrees to sell its India-based Do-It-Yourself consumer adhesives business, part of the Advanced Materials division, to Pidilite Industries for as much as $285M.
Under the deal terms, Huntsman will receive $257M in cash at closing and up to $28M under an earnout within 18 months if the business achieves sales revenue in-line with 2019.
“We have taken this business and built it from almost nothing to be a market leader in India,” Chairman, President and CEO Peter Huntsman says. “To take it to the next level of size and value, we simply do not have the footprint in India to do so.”
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