MOSCOW (MRC) -- Huntsman reported a jump in earnings despite challenges it said it faced during the second quarter related to high natural gas prices in Europe, shutdowns in China and a contracting U.S. economy, said the company.
The Woodlands-based chemical and materials company said its profit jumped 41 percent to USD242 million from USD172 million in the same period last year. Revenues increased 17 percent to USD2.4 billion compared to USD2 billion last year.
"We remain well ahead or on track to meet the targets that we presented at our Investor Day in November 2021,” said the company’s CEO Peter Huntsman, "despite an increasingly challenging economic environment due to extremely high European natural gas prices, headwinds in China associated with government-mandated shutdowns and monetary tightening in the United States."
Every dollar of price increase adds around USD10 million in annual costs for the company, Peter Huntsman said. "During these past two weeks, European gas prices moved nearly 20 percent upwards, costing us in excess of USD100 million on an annualized basis of added cost," he said.
The company may decide to reduce production at some of its European facilities in response to the crisis and increase its imports from Asia and North America. "It has become fairly clear to us that Europe's energy problems will not likely be fixed anytime soon," Huntsman said. "We will look at further consolidation and site rationalizations as we calibrate our business around what may be a more permanent reality for Europe."
Also during the quarter, the company began operating its new USD180 million splitter of MDI, or methylene diphenyl diisocyanate, in Louisiana. It expects the splitter to add USD45 million a year to the company's earnings before interest, taxes, depreciation and amortization.
We remind, Huntsman Corporation announced the start of commercial operation of a new methylene diphenyl diisocyanate (MDI) splitter at its Geismar site in Louisiana. The USD180 million splitter gives Huntsman the ability to produce more high value, differentiated grades from the crude MDI manufactured at the plant, thereby enabling growth in key customer applications.