Huntsman Beats Earnings Expectations
Huntsman Corporation (HUN) (NYSE: HUN) today reported fourth quarter 2016 results with revenues of $2,395 million, net income of $137 million and adjusted EBITDA of $256 million.
Peter R. Huntsman, our President and CEO, commented:
“At the beginning of 2016, we announced our intent to generate more than $350 million of free cash flow. We delivered a record $686 million of free cash flow in 2016, including $117 million during the fourth quarter. We used this cash, together with proceeds from the sale of our European surfactants business, to repay $560 million in debt, significantly strengthening our balance sheet.
“As I look at the past year, I am impressed by the quality of earnings that our businesses have achieved and how we are positioned moving into 2017. MDI urethanes continues to show steady and impressive growth, with differentiated MDI sales volumes growing 6% compared to last year and representing 85% of MDI urethanes EBITDA. Advanced Materials and Textile Effects have become solid performers with steady and modestly improving earnings. Our Performance Products business is poised for recovery in 2017. As TiO2 prices have rebounded, our Pigments and Additives division saw earnings double from 2015 and we expect earnings to improve meaningfully in 2017, due largely to price increases in TiO2 and the cumulative benefits of restructuring.
“We are also delivering on our commitment to separate the TiO2 business through the spin-off of Venator. We continue to make steady progress with the IRS to allow Huntsman to retain a 40% economic interest in Venator.”
Segment Analysis for 4Q16 Compared to 4Q15
The increase in revenues in our Polyurethanes division for the three months ended December 31, 2016 compared to the same period in 2015 was primarily due to higher MDI average selling prices and higher MDI sales volumes. MDI average selling prices increased sharply in Asia primarily as a result of a competitor’s outage. MDI sales volumes increased primarily due to higher demand in the Americas region. The decrease in adjusted EBITDA was primarily due to lower MTBE margins, partially offset by higher MDI margins and sales volumes.
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