MOSCOW (MRC) -- Trinseo reports third-quarter net income of USD106 million, up from USD22 million in the year-ago quarter on higher margins in most segments and cost-reduction initiatives, says the company, according to Chemweek.
Net income also included a USD50 million tax benefit. Revenue totaled USD752 million, down 18% year-over-year (YOY) from USD922 million on the pass-through of lower raw material costs. Sales volume was comparable YOY, says Trinseo, which cites strong demand recovery in automotive, tires, construction, and appliances. Adjusted earnings per share came to USD2.87, up from 67 cents in the year-ago quarter and well ahead of the average analyst estimate of USD1.86 as compiled by Refinitiv (New York).
“During the third quarter we observed significant demand recovery in many of our end markets. In addition, tighter market conditions led to higher year-over-year margins for styrene, polystyrene, polycarbonate and ABS,” says Frank Bozich, president and CEO. “We have seen demand momentum continue in October and we are cautiously optimistic that this will continue through the end of the year.”
The latex binders segment had sales of USD183 million, down 20% YOY almost entirely on the pass-through of lower raw material costs, says Trinseo. Volumes were slightly lower YOY as continued headwinds in graphical paper were not quiet offset by positive volume trends in board packaging, CASE applications, and textile, as well as the contribution of the Rheinmuenster acquisition. Adjusted EBITDA was USD20 million, down USD1 million YOY on a negative net timing variance partially offset by cost reduction initiatives.
Synthetic rubber sales totaled USD79 million, down 24% YOY, mainly on the pass-through of lower raw material costs. Demand in the tire market improved from the low levels of the second quarter. Adjusted EBITDA of negative $2 million was USD10 million below the year-ago quarter from both lower margins, including the impact of higher spot sales in ESBR, and lower fixed cost absorption from inventory reduction initiatives.
Performance plastics sales dropped 11% YOY to USD290 million, mainly on the pass-through of lower raw material costs. Adjusted EBITDA increased USD15 million to USD51 million owing to cost-reduction initiatives and expanded margins in polycarbonate and ABS resulting from tighter market conditions and improved customer mix. Sales volume into engineered materials applications decreased 3% YOY.
Polystyrene sales dropped 15% YOY to USD167 million. Lower pricing from the pass through of lower raw material costs reduced sales by 25%, but this was partially offset by higher sales volume owing to higher demand into essential applications such as packaging and appliances. Adjusted EBITDA increased USD4 million YOY to USD21 million on higher volume, particularly into appliance applications, as well as expanded margins in Asia and Europe resulting from high demand and industry utilization.
Feedstocks sales dropped 51% YOY to USD32 million owing to lower styrene pricing as well as lower styrene-related sales volume. Higher styrene margin and production propelled adjusted EBITDA to USD11 million, up YOY from breakeven.
Americas Styrenics, the joint venture between Trinseo and CPChem, turned in adjusted EBITDA of USD18 million, down USD7 million YOY, mainly on lower styrene margins in North America as well as volume-related impacts from COVID-19.
As MRC reported earlier, Trinseo, a global materials company and manufacturer of plastics, latex binders, and synthetic rubber, and its affiliate companies in Europe, have announced a price increase for all polystyrene (PS), acrylonitrile-butadiene-styrene (ABS) and acrylonitrile-styrene copolymer (SAN) in Europe, according to the company's press release as of 3 November. Effective Noveber 1, 2020, or as existing contract terms allow, the contract and spot prices for the products listed below rose as follows:
- STYRON general purpose polystyrene grades (GPPS) -- by EUR110 per metric ton;
- STYRON and STYRON A-Tech and STYRON X- Tech and STYRON C- Tech high impact polystyrene grades (HIPS) - by EUR110 per metric ton;
- MAGNUM ABS resins - by EUR110 per metric ton;
- TYRIL SAN resins - by EUR80 per metric ton.
According to MRC's ScanPlast report, Russia's estimated consumption of PS and styrene plastics totalled 362,820 tonnes in the first nine months of 2020, down by 1% year on year. September total estimated PE consumption in Russia was 48,690 tonnes, up by 13% year on year.
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. Trinseo had approximately USD3.8 billion in net sales in 2019, with 17 manufacturing sites around the world, and approximately 2,700 employees.