MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex and synthetic rubber, has reported its first quarter 2015 financial results with revenue of USD1,018 million and Adjusted EBITDA excluding inventory revaluation of USD151 million, as per the company's report.
Effective January 1, 2015, Trinseo reorganized its business under two new divisions called Performance Materials and Basic Plastics & Feedstocks. The Performance Materials division now includes the following reporting segments: Synthetic Rubber, Latex, and Performance Plastics. The Basic Plastics & Feedstocks division represents a separate segment for financial reporting purposes and includes styrenic polymers, polycarbonate, and styrene monomer. In addition, the Basic Plastics & Feedstocks division includes the results of our two 50%-owned joint ventures, Americas Styrenics LLC, or Americas Styrenics, and Sumika Styron Polycarbonate Limited.
The compnany believes that this new organizational structure better reflects the nature of Trinseo by grouping together segments with similar strategies, business drivers and operating characteristics.
Commenting on the company’s performance, Chris Pappas, Trinseo President and Chief Executive Officer, said, "We had a great start to 2015 with a very strong first quarter. We had record Adjusted EBITDA excluding inventory revaluation at the consolidated level, and in our Basic Plastics & Feedstocks division. In addition, we had record Adjusted EBITDA in the Performance Plastics segment. We are now seeing the strength of our consistent EBITDA in the Performance Materials division coupled with the cyclical lift in the Basic Plastics & Feedstocks division."
Pappas continued, "We recently refinanced our debt, creating a new capital structure that is consistent with our public company peers and which provides us with increased liquidity, a natural hedge against our euro-denominated EBITDA, and a much lower cost of borrowing, which will positively contribute to our earnings and free cash flow. At current interest rates, the transaction will reduce our cash interest by approximately USD37 million per year, which equals approximately sixty-five cents of earnings per diluted share."
Revenue in the first quarter decreased 25% versus prior year and 9% versus prior quarter due to the pass through of lower raw material cost, with the significant decline in the overall energy complex, and currency, as the euro weakened in comparison to the U.S. dollar. These impacts were partially offset by an increase in sales volume across all of our segments, which was aided by customer restocking in the current quarter after a period of destocking in the latter part of 2014.
First quarter Adjusted EBITDA of USD109 million included a USD42 million unfavorable impact from inventory revaluation. Adjusted EBITDA excluding inventory revaluation of USD151 million was USD68 million higher than prior year and USD47 million higher than prior quarter. These increases were due mainly to higher margins in polycarbonate, from the company's restructuring efforts and market improvement, higher margins in Performance Plastics, due to declining raw material costs during the quarter, and improved performance in styrene monomer, styrenic polymers, and at Americas Styrenics driven by first quarter industry restocking and overall stronger market conditions ahead of planned outages.
Formerly known as Styron, Trinseo has completed the name change process for most legal entities around the world. Some Styron companies are still completing this process and will continue to do business as Styron until their respective name changes are complete.
Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo’s technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015.