MOSCOW (MRC) -- Eastman Chemical Company’s sales revenue decreased to USD2,205 million in Q4 2019 compared to USD10,151 million in Q4 2018, reported Fibre2Fashion.
The 2019 full-year revenue ending January 30, 2020, decreased to USD9,273 million compared to USD10,151 million for year 2018. Eastman is a global specialty materials company that produces products found in items people use every day.
"We demonstrated resilience in the fourth quarter despite continued difficult global economic conditions impacting consumer discretionary markets such as transportation," said Mark Costa, board chair and CEO. "Notwithstanding the challenging conditions, for the year, we continued to make strong progress growing new business revenue from innovation and market development initiatives, particularly in the Advanced Materials segment. In addition, with full-year free cash flow approaching USD1.1 billion, we once again showed our capability to generate strong cash flow. Although we don’t expect global economic conditions to improve in the coming year, we remain confident in our strategy and the strength of our cash flow going forward."
In Additives & Functional Products segment, sales revenue decreased primarily due to lower selling prices, lower sales volume, and an unfavourable shift in foreign currency exchange rates for the fourth quarter of 2019 compared to 4Q 2018.
In Advanced Materials segment, sales revenue decreased due to slightly lower sales volume and an unfavourable shift in foreign currency exchange rates in 4Q 2019.
In the Chemical Intermediates segment, sales revenue decreased primarily due to lower selling prices across the segment attributed to lower raw material prices and increased competitive activity.
In Fibers segment, sales revenue decreased primarily due to lower acetate tow sales volume attributed to weakened market demand resulting from general market decline and customer buying patterns.
"We enter 2020 in a period of significant uncertainty related to macro factors that are out of our control. In this environment, we are focused on what we can control, including growing new business revenue by leveraging our innovation-driven growth model, aggressive cost management, and disciplined capital allocation. We are currently assuming that slow growth continues in 2020 at levels similar to 2019, although with less inventory destocking. Taking all of this together, we expect 2020 adjusted earnings per share to be between USD7.20 and USD7.60 and free cash flow to be between USD1.0 billion and USD1.1 billion," said Costa.
As MRC informed previously, Eastman Chemical wanted to reduce its surplus ethylene and commodity intermediates in 2016, but did not intend to sell its cracker in Longview, Texas, said chief executive Mark Costa in February, 2016.
We also remind that on 31 January, 2020, the company shut its cracker No. 3 in Longview because of a technical glitch. This unit has a production capacity of 215,000 tonnes of ethylene per year. Eastman also operates cracker No. 4 at this site with the capacity of 355,000 tonnes of ethylene per year. This cracker was taken off-stream from 19 to 24 January, 2020, due to a leak.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
Eastman is a global specialty chemical company that produces a broad range of products found in items people use every day. With a portfolio of specialty businesses, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. Its market-driven approaches take advantage of world-class technology platforms and leading positions in attractive end-markets such as transportation, building and construction and consumables. Eastman focuses on creating consistent, superior value for all stakeholders. As a globally diverse company, Eastman serves customers in approximately 100 countries and had 2014 revenues of approximately USD9.5 billion. The company is headquartered in Kingsport, Tennessee, USA and employs approximately 15,000 people around the world.
MRC