Company News
November 4, 2024
Huntsman Q3 Results
Huntsman Announces Third Quarter 2024 Earnings
Download as PDFNovember 04, 2024 4:15pm EST
Third Quarter Highlights
- Third quarter 2024 net loss attributable to Huntsman of $33 million compared to net income of $0 million in the prior year period; third quarter 2024 diluted loss per share of $0.19 compared to diluted income per share $0.00 in the prior year period.
- Third quarter 2024 adjusted net income attributable to Huntsman of $17 million compared to adjusted net income of $27 million in the prior year period; third quarter 2024 adjusted diluted income per share of $0.10 compared to adjusted diluted income per share of $0.15 in the prior year period.
- Third quarter 2024 adjusted EBITDA of $131 million compared to $136 million in the prior year period.
- Third quarter 2024 net cash provided by operating activities from continuing operations was $134 million. Free cash flow from continuing operations was $93 million for the third quarter 2024 compared to $117 million in the prior year period.
- Successfully placed $350 million of senior notes due 2034 with a 5.7% coupon rate. The proceeds were used for general corporate purposes, including repayment of debt.
| Three months ended | Nine months ended | |||||||
| September 30, | September 30, | |||||||
| In millions, except per share amounts | 2024 | 2023 | 2024 | 2023 | ||||
| Revenues | $ 1,540 | $ 1,506 | $ 4,584 | $ 4,708 | ||||
| Net (loss) income attributable to Huntsman Corporation | $ (33) | $ – | $ (48) | $ 172 | ||||
| Adjusted net income(1) | $ 17 | $ 27 | $ 30 | $ 103 | ||||
| Diluted (loss) income per share | $ (0.19) | $ – | $ (0.28) | $ 0.95 | ||||
| Adjusted diluted income per share(1) | $ 0.10 | $ 0.15 | $ 0.17 | $ 0.57 | ||||
| Adjusted EBITDA(1) | $ 131 | $ 136 | $ 343 | $ 428 | ||||
| Net cash provided by operating activities from continuing operations | $ 134 | $ 167 | $ 126 | $ 85 | ||||
| Free cash flow from continuing operations(2) | $ 93 | $ 117 | $ (7) | $ (62) | ||||
| See end of press release for footnote explanations and reconciliations of non-GAAP measures. | ||||||||
THE WOODLANDS, Texas, Nov. 4, 2024 /PRNewswire/ — Huntsman Corporation (NYSE: HUN) today reported third quarter 2024 results with revenues of $1,540 million, net loss attributable to Huntsman of $33 million, adjusted net income attributable to Huntsman of $17 million and adjusted EBITDA of $131 million.
Peter R. Huntsman, Chairman, President, and CEO, commented:
“The third quarter was consistent with our outlook of a stable environment at trough conditions in our core construction and industrial markets. Total volumes for the Company did improve 5% in the quarter versus the prior year with stable margins sequentially. Construction and transportation account for approximately three quarters of our volumes and we expect near term trough conditions to persist through a seasonally lower fourth quarter. For the medium to long-term, interest rate cuts by the Federal Reserve and ECB, combined with government stimulus in China, should have a positive impact across our global portfolio, primarily in construction. In the meantime, we are focused on what we control – improving our cost position and our balance sheet strength to maintain optionality to invest in our core businesses in a disciplined manner. We were pleased by the success of our strong bond offering in the third quarter which points to the long-term strength of our portfolio and anticipation of market improvements in the coming years.”
Segment Analysis for 3Q24 Compared to 3Q23
Polyurethanes
The increase in revenues in our Polyurethanes segment for the three months ended September 30, 2024 compared to the same period of 2023 was primarily due to higher sales volumes, partially offset by lower MDI average selling prices. Sales volumes increased primarily due to improved demand and share gains in certain markets. MDI average selling prices decreased primarily due to less favorable supply and demand dynamics. The decrease in segment adjusted EBITDA was primarily due to lower MDI average selling prices and lower equity earnings from our minority-owned joint venture in China, partially offset by lower fixed costs and higher sales volumes.
Performance Products
The increase in revenues in our Performance Products segment for the three months ended September 30, 2024 compared to the same period of 2023 was primarily due to higher sales volumes, partially offset by lower average selling prices. Sales volumes increased primarily due to improved demand in fuels and lubes and coatings and adhesives markets. Average selling prices decreased primarily due to competitive pressure. The decrease in segment adjusted EBITDA was primarily due to lower average selling prices and unfavorable sales mix, partially offset by higher sales volumes and lower fixed costs.
Advanced Materials
The decrease in revenues in our Advanced Materials segment for the three months ended September 30, 2024 compared to the same period of 2023 was primarily due to lower average selling prices, partially offset by higher sales volumes. Average selling prices decreased primarily due to unfavorable sales mix. Sales volumes increased in our aerospace and coatings markets driven by market recovery, partially offset by lower demand in our industrial market. The decrease in segment adjusted EBITDA was primarily due to higher fixed costs.
Corporate, LIFO and other
For the three months ended September 30, 2024, adjusted EBITDA from Corporate and other was a loss of $34 million as compared to a loss of $41 million for the same period of 2023. The increase in adjusted EBITDA from Corporate and other resulted primarily from decreases in corporate overhead costs and unallocated foreign currency exchange losses, partially offset by an increase in LIFO valuation losses.
Liquidity and Capital Resources
During the three months ended September 30, 2024, our free cash flow from continuing operations was $93 million as compared to $117 million in the same period of 2023. As of September 30, 2024, we had approximately $1.7 billion of combined cash and unused borrowing capacity.
During the three months ended September 30, 2024, we spent $41 million on capital expenditures from continuing operations as compared to $50 million in the same period of 2023. During 2024, we expect to spend between approximately $180 million to $190 million on capital expenditures.
Income Taxes
In the third quarter of 2024, our effective tax rate was 115% and our adjusted effective tax rate was 41%. We expect our 2024 adjusted effective tax rate to be between approximately 30% to 34%. We expect our long-term adjusted effective tax rate to be between approximately 22% to 24%.
October 31, 2024
L&P Urethane Highlights from Investors Call
Leggett & Platt, Incorporated (LEG) Q3 2024 Earnings Call Transcript
Oct. 29, 2024 12:41 PM ETLeggett & Platt, Incorporated (LEG) Stock
Q3: 2024-10-28 Earnings Summary
EPS of $0.32 misses by $0.01 | Revenue of $1.10B (-6.27% Y/Y) misses by $2.12M
Leggett & Platt, Incorporated (NYSE:LEG) Q3 2024 Earnings Conference Call October 29, 2024 8:30 AM ET
Company Participants
Cassie Branscum – Vice President, Investor Relations
Karl Glassman – Chief Executive Officer
Ben Burns – Chief Financial Officer
Tyson Hagale – President, Bedding Products
Sam Smith – President, Furniture, Flooring & Textile Products
Karl Glassman
Good morning, and thank you for joining our call today. As we begin, I want to thank our employees for their continued hard work and dedication as we navigated a challenging macro backdrop. Our third quarter sales and earnings were below our expectations, largely due to weaker than anticipated demand in residential end markets in headwinds, in Automotive, Hydraulic Cylinders and Geo Components.
Sluggish demand in these businesses is expected to persist through the fourth quarter and is expected to be more impactful than previously anticipated. As a result, we are reducing full year sales and earnings guidance, which Ben will detail later in the call.
Now, I’d like to highlight a few of the current demand dynamics in our key end markets. The US bedding market continues to experience negative volume comps. Although some improvement in demand has been observed during holiday sales in between periods has been softer.
We estimate that US mattress consumption was approximately flat in the third quarter, but domestic production was likely down high single digits. Given a more challenging macro environment and softening in consumer spending, we expect the domestic market will continue to be pressured in the fourth quarter and expect 2024 domestic units to be down mid single digits versus last year.
While we are encouraged to see the Fed begin a cycle of interest rate cuts, we know a series of cuts is needed to meaningfully impact housing turnover. And there will also be a lag between improvement in housing trends and an improvement in mattress demand.
We still anticipate that our 2024 Bedding Products segment volume will be down high single digits due to company-specific factors. Excluding higher trade rod sales for non-bedding applications, segment volume would be expected to be down low double digits. However, it’s important to note that our ComfortCore and semi finished products continued to perform in line with or better than domestic mattress production trends. And we are working closely with our customers on a number of product line refreshes and value engineering opportunities.
I’m pleased to share that our restructuring plan remains on track and our teams have done an excellent job executing the plan. We will exit our Mexican innerspring operation by year end, which will conclude all innerspring related restructuring activity in the bedding products segment.
Within Specialty Foam, we have close to operations and expect one more consolidation to be complete by year end. Early in the fourth quarter, we closed one adjustable bed location and shifted production to a more cost advantage facility to reduce excess capacity and improve our cost structure. Restructuring initiatives in the furniture, flooring and textiles product segments are also on track. We successfully executed the restructuring activity in home furniture and we expect to complete phase one of our flooring products restructuring by early next year.
Bobby Griffin
Good morning everybody. Thanks for taking my questions. Talking more about — the first thing I want to chat on Karl maybe just the comments on 3Q bedding consumption being flat year over year that, I understand the mix between domestic and imports was a move those numbers around some, but I guess the overall flat surprised me a little. Do you believe that’s just a function of a flush of imports coming into the market are kind of what do you think that’s driving that? Because I guess the flat to me in today’s macro was a little bit better just from a pure consumption standpoint.
Karl Glassman
Yes, Bobby, thanks for the question. I remember it’s off a relatively easy comp in 3Q, ’23. The imports have slowed. But as we had said previously, there was a significant amount of imports that came in right before the duties were levy [ph] and read. We believe that those are underway windy. But Tyson, how else would you answer that question?
Tyson Hagale
Sure, thanks and good morning Bobby. You got the right call. We did see the significant ramp up late last year with the imports coming in ahead of the duties and then they slowed in the first and second quarter. But there was a pretty significant overhang for what came in at the end of last year. We did see some incremental growth in inflated imports into the third quarter versus second quarter, but still not nearly to the levels that we saw last year. But really Bobby, I just kind of looking at some of the channel information that we review and especially on some of the e-com channels, we did see quite a lot of activity in the third quarter. And so that’s where we get to overall flat, but much slower and softer for our domestic production and consumption.
October 31, 2024
BASF Quarterly Highlights
BASF SE (BASFY) Q3 2024 Earnings Call Transcript
Oct. 30, 2024 11:33 AM ETBASF SE (BASFY) Stock, BFFAF Stock
BASF SE (OTCQX:BASFY) Q3 2024 Earnings Conference Call October 30, 2024 8:00 AM ET
Company Participants
Stefanie Wettberg – SVP of IR
Markus Kamieth – CEO & Chairman of the Board of Executive Directors
Dirk Elvermann – Member of the Board of Executive Directors, CFO & Chief Digital Officer
Markus Kamieth
Good morning, everyone. Welcome to our Analyst Conference Call. Today, Dirk and I will provide you with details on our business development in the third quarter. It’s roughly one month since we presented BASF’s new strategy at our Capital Markets Day. Thanks again to those of you who were able to attend either in person or virtually. And overall, we all have the impression that our key messages were understood and also in general well received.
Let’s now start with an overview of BASF’s performance in Q3. With €15.7 billion, sales matched the level of the prior-year quarter. Volumes of BASF Group excluding precious and base metals increased by 7%. All segments achieved volume growth, with the exception of Surface Technologies. Here, volumes in the Catalysts division declined, while the Coatings division recorded higher volumes. Prices were slightly positive, excluding precious and base metals. The pressure on sales prices thus continued to ease. Currency headwinds dampened sales growth by 3%. Negative currency effects were mainly related to the Argentine Peso and the Brazilian Real.
EBITDA before special items improved by 5% and came in at €1.6 billion. The positive earnings momentum in our core businesses, which was already visible in the first half of 2024, continued in the third quarter, driven by higher volumes and higher margins. Considerably higher earnings in BASF’s core businesses more than offset lower contributions from the standalone businesses in Q3 2024.
Here you can see a snapshot of how the markets and our segments’ volumes and specific margins developed in the third quarter. In a slightly improving market environment for base chemicals, we achieved strong volume growth in the Chemicals segment. The Petrochemicals division increased specific margins, while margins in the Intermediates division remained stable. EBITDA before special items in the Chemicals segment increased considerably compared with the prior-year quarter. In an overall stable market environment, the Materials segment benefited from slightly higher volumes, particularly in the MDI, propylene oxide and ammonia value chains. The considerable increase in specific margins was largely driven by a few product lines in the Monomers division and led to a significant increase in the segment’s EBITDA before special items.
Chetan Udeshi
Yeah. Thank you. Morning all. I just wanted to follow up on the question on Q4 guidance because I’m sorry, but I really don’t understand why you expect Q4 to be better than Q3. So let’s try other way around. Can you maybe give us a bit more color by segments where you actually think Q3 will be better than — Q4 will be better than Q3 in terms of EBITDA, as you seem to suggest in your group guidance? And the second question I had was on Activision [ph]. Clearly the volumes are coming back very, very strongly, but I go back to the question I had asked on CMD as well. I’m just surprised that there is typically what we see with companies or specialty chemical companies where R&D spending is high. You usually have Euro based pricing. So when FX moves a lot against you sort of try to pass it on to your customers because you’ve got that differentiated products. But here in Ag chemicals business, what we see is the FX impact is very, very big and on top the price is also down. I mean, that just seems very unlike a specialty business. So, just any thoughts around that?
Markus Kamieth
Yeah, Chetan your question, I mean, I would not go now into individual segment guidances on Q4. In general, let me give you maybe some thoughts on this. I mean, what we see and you have seen this now throughout Q2-Q3, the overall earnings momentum in our chemicals businesses, so what we now call core businesses is actually quite favorable compared to last year. And we are seeing both volume growth in almost all divisions and margin expansion. The trend that certainly in Q4 will be more challenging is the volume picture in this area, but the margin is actually holding up quite well because when you look at raw material markets, most of them are actually walking sideways or actually receding. So the margin picture is actually quite positive and we are expecting also this momentum in most divisions to carry forward. So we are quite optimistic that despite, of course, always yearend challenges in buying behavior of customers, we can see a continued good momentum, especially margin wise in the chemicals businesses. And then Dirk has already alluded to some of the effects that we will also see in our P&L coming in the fourth quarter. And so, in our books, the 8 billion lower end of the guidance is achievable. We’re confident that we will be there at the end of the year.
October 31, 2024
Stepan Earnings Call Highlights
Stepan Company (SCL) Q3 2024 Earnings Call Transcript
Oct. 30, 2024 12:34 PM ETStepan Company (SCL) Stock
Q3: 2024-10-30 Earnings Summary
EPS of $1.03 beats by $0.38 | Revenue of $546.84M (-2.74% Y/Y) misses by $30.39M
Stepan Company (NYSE:SCL) Q3 2024 Earnings Conference Call October 30, 2024 9:00 AM ET
Company Participants
Sam Hinrichsen – Vice President and Interim CFO
Quinn Stepan – Chairman
Luis Rojo – President and CEO
Quinn Stepan
Good morning. Today we announce that our Board of Directors has appointed Luis Rojo as the company’s President and CEO and a member of the Board, effective immediately. Luis succeeds Scott Behrens, who has served in that role for the past three years. We thank Scott for his leadership and his many contributions to the growth and diversification of Stepan over his 30-year career with the company.
As you are aware, Luis has served as the CFO of Stepan for the past seven years. During his tenure, Luis has developed a deep understanding of all aspects of our business. And while he naturally has a strong financial mindset that will serve him well in the CEO role, he is also a strategic thinker and will ensure we execute on present market and operational opportunities.
He is a passionate leader who cares deeply about our customers, employees and shareholders. Together with the strong team we have at Stepan, he will drive our profit recovery and deliver value for our shareholders. The Board and I have great confidence in Luis and look forward to working with him in his new role.
With that, I would like to turn the call over to Luis. Congratulations, Luis.
Luis Rojo
Thank you, Quinn, and good morning. And thank you all for joining us today to discuss our third quarter 2024 results. I plan to share highlights from our third quarter performance and will also share updates on our key strategic priorities, while Sam will provide additional details on our financial results.
The company reported third quarter adjusted EBITDA of $53 million, up 11% versus the prior year. This double-digit adjusted EBITDA growth was driven by improved volumes and margins in our Surfactant business. Global sales volume was down 1%.
Double-digit growth in several Surfactant end markets was fully offset by demand weakness and competitive pressures in our Polymers business. We believe this sluggish demand in Polymers is related to global macroeconomic uncertainties, low overall construction activity, and the high interest rate environment.
Third quarter adjusted net income was up significantly, driven by improved Surfactant and Specialty Products results and a lower tax rate. Year-to-date, adjusted EBITDA was $152 million, up 7% versus the prior year, driven by improved volumes and margins.
Free cash flow for the first nine months of the year was $7 million and we remain confident that we will close 2024 with positive free cash flow. The company is on track to deliver our $50 million cost reduction goal for 2024 through ongoing discipline efforts in supply chain and the workforce productivity actions taken in the last quarter of 2023.
During the third quarter of 2024, the company paid $8.4 million in dividends to our shareholders. Our Board of Directors declared a quarterly cash dividend on Stepan common stock of $0.385 per share, payable on December 13, 2024. This represents a 2.7% increase in our dividends. Stepan has paid an increased dividend for 57 consecutive years.
Now on Slide 8, Polymer net sales were $150 million for the quarter, a 12% decrease versus the prior year. Selling prices decreased 3%, primarily due to the pass-through of lower raw material costs and competitive pressures. Volume declined 11% in the quarter.
Global Rigid Polyols volume was down 13% due to sluggish demand and competitive pressures. We believe the sluggish demand is related to global macroeconomic uncertainties, overall low construction activity and the high interest rate environment.
Specialty Polyols volume was up low single digits. Foreign currency translation positively impacted net sales by 2%. Polymer adjusted EBITDA decreased $6.3 million or 21%, versus the prior year, primarily due to the 11% decline in sales volume.
Our customers will always remain at the center of our strategy and innovation. Our longstanding Tier 1 customers value our technical capabilities and our ability to manufacture and deliver quality products at the scale they need. Our Tier 1 customer base remains a solid foundation of our business. Continuing our new customer acquisition with Tier 2 and Tier 3 customers remains a key priority. This is an important and profitable growth channel within our Surfactant business. In the first nine months, our volume grew high single digits and we added over 1,200 new customers.
Our diversification strategy into more functional products remains a key focus area. In the first nine months, we grew double digits in Oilfields and Construction and Industrial Solutions. Our Agricultural business resumed growth and delivered 22% year-over-year volume growth in the third quarter after a difficult first half.
We remain optimistic Rigid Polyol demand will increase as the market gets more macroeconomic clarity and the interest rate environments improve. Insulation remains a critical enabler of a more sustainable and energy-efficient world. Our Polymers business continues to focus on developing the next generation Rigid Polyol technologies that can increase the energy efficiency and cost performance of our customer insulation products. Additionally, we are excited about the new products we are introducing in the growing Spray Foam end market.
Moving to slide 11, construction of our new alkoxylation production facility in Pasadena, Texas is 99% complete and we are excited to start the plant in December. We expect the full contribution growth rate of the plant to be achieved in the second half of 2025.
After completing a three-year capital investment program last year, Stepan now has the largest installed Low 1,4-Dioxane production capacity serving the North American merchant market. For the first nine months of 2024, margin contribution from Low 1,4-Dioxane produce grew versus the prior year.
To conclude, we remain pleased that several of our Surfactant businesses continue to deliver double-digit volume growth during the quarter. Third quarter Agricultural volumes grow in double digits, aligned with our expectations for a second half 2024 recovery. We remain optimistic Rigid Polyol demand will increase as the market gets more macroeconomic clarity and the interest rate environment improves next year.
Dave Storms
Congrats on the new role there, Luis. And I just kind of wanted to start with Rigid Polyol. You mentioned a couple of times that there’s obviously macro headwinds. Are there any specific catalysts that you’re keeping an eye on that might bring some clarity to the macro market and maybe how fast could we see a rebound there if any of those catalysts come to fruition?
Luis Rojo
Great question, Dave. Look, as we said, and you can see a lot of statistics out there, the construction activity, both residential and non-residential, is pretty weak. Now, if you look at has been very weak in the short-term, and the expectation is that with moderation in interest rates, we should see a pickup in activity in 2025.
Let me remind you guys that this is a market that has been growing high single digits over the last 10 years to 20 years. The need for better insulation is there. The new codes in different states and different countries in Europe continues changing. And we believe the market growth, even though it was 7%, 8%, 9% in the past, we believe it’s going to be that — we believe we are going to see this type of market growth 3%, 4%, 5% into the future.
So we are confident with our Rigid Polyol business in the next five years. When you think — when you look at trends in pent-up demand for re-roofing and all the construction that happens early 2000 that needs re-roofing in the next five years, all those things are very, very positive.
So we feel good about the lamination market growth opportunities going forward and we are heavily working on our diversification strategy to get into the high margin and growing Spray Foam business, which is critical for us as well to get into residential insulation and all of that. But great question and we feel good about the Polymers business for the future.
https://seekingalpha.com/article/4730963-stepan-company-scl-q3-2024-earnings-call-transcript
October 31, 2024
Nippon Paint Acquires AOC
Lone Star Announces Sale of AOC to Nippon Paint Holdings
October 28, 2024 07:00 AM Eastern Daylight Time
DALLAS & NEW YORK & LONDON & TOKYO–(BUSINESS WIRE)–Lone Star Funds (“Lone Star”) today announces the signing by an affiliate of Lone Star Fund XI, LP of a definitive agreement to sell AOC, a leading global specialty chemicals company, to Nippon Paint Holdings Co., Ltd. (“NPHD”).
“AOC is backed by a strong management team that has been instrumental in driving the company’s success and unlocking value. We believe AOC is well-positioned for continued growth, and we wish the team continued success in the future.”Post this
AOC is a leading manufacturer of specialty chemical formulations in the unsaturated polyester and vinyl ester sectors. With operations in North America, Europe and Asia, AOC serves customers globally in the infrastructure, construction (residential and commercial), transportation, and recreation sectors.
Under Lone Star’s stewardship, AOC invested in its core business systems, including commercial excellence, innovation, procurement and manufacturing efficiency, to drive earnings growth. AOC also invested in the expansion of its executive leadership team, broadening the capabilities of the team to efficiently manage the global enterprise. AOC is poised to capitalize on its next leg of growth, supported by a well-capitalized asset base and a world-class management team.
“We are immensely proud of the growth and innovation AOC has achieved during our ownership,” said Donald Quintin, Chief Executive Officer of Lone Star. “AOC is backed by a strong management team that has been instrumental in driving the company’s success and unlocking value. We believe AOC is well-positioned for continued growth, and we wish the team continued success in the future.”
Joe Salley, Chief Executive Officer of AOC said, “I would like to thank Lone Star for their support and partnership over the last three years. I would also like to thank our outstanding management team and employees for their tireless efforts to deliver best-in-class results for our customers and shareholders. We are excited about the opportunities that lie ahead as we join Nippon Paint Group, a company that shares our commitment to integrity, quality and innovation.”
The transaction is subject to certain closing adjustments and conditions, including regulatory clearances, and is expected to close in the first half of 2025.
Morgan Stanley & Co. LLC and Citi served as sell-side financial advisors and Gibson, Dunn & Crutcher LLP provided legal advice to seller. AOC Management was advised by Jamieson Corporate Finance, Katzke & Morgenbesser LLP.
About AOC
AOC is a leading global supplier of specialty formulations and solutions which enable customers to create robust, durable, and versatile products and components for applications in Coatings and Protective Barriers, Colorants and Visual Effects, Adhesives and Specialties, and conventional Composites.
With strong capabilities worldwide in manufacturing and science, the company works closely with customers to deliver unrivaled quality, service, and reliability for today and create innovative solutions for tomorrow.
About Lone Star
Lone Star is a leading private equity firm advising funds that invest globally in corporate equity, credit, real estate and other financial assets. Since the establishment of its first fund in 1995, Lone Star has organized 25 private equity funds with aggregate capital commitments totaling approximately $95 billion. The firm organizes its funds in three series: the Opportunity Fund series; the Commercial Real Estate Fund series; and the U.S. Residential Mortgage Fund series. Lone Star invests on behalf of its limited partners, which include institutional investors such as pension funds and sovereign wealth funds, as well as foundations and endowments that support medical research, higher education, and other philanthropic causes. For more information regarding Lone Star Funds, go to www.lonestarfunds.com.
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