AdvanSix Q3 revenues, earnings decreased

AdvanSix’s Q3 adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell 57% year on year, said the company.

Despite the 18% decline in volumes, sales rose 7% as market-based pricing was favorable, driven by higher pricing across the company’s ammonium sulphate and nylon product lines.

Raw material pass-through pricing was favourable by 4%, following a net cost increase in benzene and propylene, both inputs to cumene, which is a key feedstock for the company's products.

Earlier it was written, AdvanSix announced a preliminary update on its 3Q 2022 planned turnaround activities and its expected 3Q 2022 financial results. The company expects 3Q 2022 adjusted EBITDA to be in the range of USD31 M to USD34 M.

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Huntsman third-quarter (Q3) sales and earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell, year on year, as business becomes “increasingly difficult” across the globe, especially in Europe, said the company.

CEO Peter Huntsman said Europe has been the hardest hit region from surging energy prices, adding the current crisis and an energy ‘new normal’ could cause lasting damage to European chemical's global competitiveness.

The company’s polyurethanes (PU) division posted the most negative results, with sales and EBITDA falling; this division produces chemicals such as polyols, methylene diphenyl diisocyanate (MDI), as well as thermoplastic polyurethanes (TPUs) and coatings, among others.

The divisions called Performance Products and Advanced Materials, however, increased sales and earnings during the third quarter.
Despite the hit in Q3, Huntsman’s January-September sales and earnings remain higher than in the same period of 2021.

CEO Huntsman painted quite a catastrophic picture of the EU economy, which has been badly hit by the war in Ukraine and soaring energy prices. He linked the current woes to the long-term competitiveness of European chemicals production, as now more than ever before, the production of chemicals in Europe comes at a high price as surging utility costs hurt energy-intensive sectors.

Huntsman said on Friday it will implement further cost savings programmes which are to go “above and beyond” the company previously announced savings. "The global business environment has become increasingly difficult with growth slowing across many of our end markets. Specifically in Europe, the inflationary impact from record high energy prices combined with declining demand is pressuring our European facilities and margins in ways no one anticipated ... A 'new normal' will not include favourable energy prices and competitiveness the EU once enjoyed,” said the CEO.

“To mitigate these market conditions, in the short term, we have significantly reduced our production rates … [and] we are committing to further realign our cost structure above and beyond our previously announced cost optimisation programs with additional restructuring in Europe.” He fell short of giving more Europe-specific details. However, he said the company has already identified, globally, $40m in potential restructuring to the end of 2023.

In September, Huntsman slashed its Q3 guidance due to Europe’s woes; the company’s CEO, meanwhile, warned in August that high energy costs and the inability to pass them onto customers were threatening the future of methylene diphenyl diisocyanate (MDI) manufacturing in Europe.

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.
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Abu Dhabi Chemicals Derivatives Company RSC Ltd (“TA’ZIZ”) and Reliance Industries Limited (RIL), have agreed to launch TA’ZIZ EDC & PVC, a world-scale chemical production partnership at the TA’ZIZ Industrial Chemicals Zone in Ruwais, said Transportandlogisticsme.

The new joint-venture will construct and operate a Chlor-Alkali, Ethylene Dichloride (EDC) and Polyvinyl Chloride (PVC) production facility, with an investment of more than USD2 billion.

Representing the first production of these chemicals in the UAE, the project will enable the substitution of imports and the creation of new local value chains, while also meeting growing demand for these chemicals globally.

The TA’ZIZ Industrial Chemicals Zone is a joint venture between Abu Dhabi National Oil Company (ADNOC) and ADQ.

The project builds on ADNOC and Reliance’s long-standing strategic partnership and is Reliance’s first investment in the MENA region.

The signing of the joint venture terms, which are subject to regulatory approvals, was witnessed by His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Managing Director and Group CEO and Reliance Industries Chairman and Managing Director, Mr. Mukesh D. Ambani.

The joint venture terms were signed by Mr. Khaleefa Al Mheiri, Acting CEO of TA’ZIZ and Mr. Kamal Nanavaty, President Strategy and Business Development of Reliance Industries Limited.

We remind, Abu Dhabi National Oil Co (ADNOC) plans to build a steam cracker in Ruwais, in line with its goal of more than doubling the chemical production capacity at the TA’ZIZ Industrial Chemicals Zone. A feasibility study on the project is under way, with the design phase set to commence in the first quarter of 2023, ADNOC said in a statement on 3 November.
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The Q3 results of Brazil’s federal oil firm Petrobras exceeded expectations, but the market is cautious about the future of the company under president-elect Luiz Inacio Lula da Silva, Sidney Lima, analyst at Top Gain, told BNamericas.

Petrobras reported recurring net income of USD8.8bn and revenues of US$32.4bn, up 164% and 40% year-on-year. Lima highlighted that all areas improved, including E&P, which grew 47%, diesel (71%), gasoline (22%) and derivatives (24%).

"But there is caution with the change of government. [Lula’s Workers’ Party] defends using Petrobras as a social policy, so there’s uncertainty about the stability of the company's cash flow," Lima said.

Another point of contention is the anticipated distribution of dividends, which totaled 43.7bn reais (US$8.63bn) in the third quarter. One day after the publication of the results, the public prosecutor’s office requested the suspension of dividend payments, alleging risks to financial sustainability.

The night before, oil workers federation FUP and the association of oil minority shareholders of Petrobras (Anapetro) said they would take legal action to prevent the distribution of dividends, which, in the accumulated total for the year, already amounts to 180bn reais – compared to a net profit of 145bn reais in the period.

Mahatma dos Santos, a researcher at oil association Ineep said the increase in fuel prices and the reduction in exploration costs allowed Petrobras to practically triple the volume of dividends distributed.

"Not even the decline in production and marketing of derivatives this quarter [compared to the same period in 2021] changed the company's strategy of prioritizing the generation of value for its shareholders," he said in a statement.

Claudio Araujo Pinho, a lawyer specialized in oil and gas, said that the distribution of dividends this year does not agree with the law on state-owned companies, undermining the possibility of future investment and ignoring its social function.

According to Pinho, the board might not endorse the anticipated Q3 distribution of dividends once Lula takes office in January. "This will demonstrate the low governance of the current state-controller of Petrobras," he told BNamericas.

Flavio Conde, analyst at Levante Investimentos, underlined that the dividend distribution was split, contributing to the public accounts of the Bolsonaro government and to Lula's early term.

"It seems little to close the fiscal deficit of 2023, but all help is welcome," Conde told BNamericas.

We remind, Petrobras said it has signed a contract to sell the REMAN refinery in the northern state of Amazonas for USD189.5 MM to Ream Participacoes S.A., a subsidiary of distributor Atem. In a separate filing, however, the company formally known as Petroleo Brasileiro SA said it had failed to secure a buyer for the Abreu e Lima (RNEST) refinery after the interested firms declined to offer a bid. Petrobras said it would end the sale process, and analyze its next steps.

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AkzoNobel has become the global refinish partner for new energy vehicle manufacturer BYD Auto Sales Company Ltd. – currently the world’s leading seller of electric vehicles, said the company.

The company has been a recommended supplier of vehicle refinish products and services to BYD in China since 2017. The new deal means that agreement will continue, while extending the partnership to serve BYD’s bodyshops and approved repairer networks worldwide.

Originally a battery maker, BYD now has more than 1,180,000 new energy vehicles in operation, having been ranked first in China’s electric vehicle sales for six consecutive years (2014 to 2019).

“We’re delighted to broaden our partnership with BYD globally and together push ahead with our shared ambition of reducing carbon emissions,” says Patrick Bourguignon, Director of AkzoNobel’s Automotive and Specialty Coatings business. “Making transport more sustainable is a major driving force behind our innovation and BYD will benefit from a host of digital tools and cutting-edge services, as well as our class-leading vehicle refinish systems.”

One of these tools will include the recently launched CO2eRepairCalculator – the vehicle refinish industry’s first repair system designed to measure, manage and reduce carbon emissions. It’s part of a new initiative which aims to encourage bodyshops to become more sustainable.

Other digital solutions being provided include MIXIT, AkzoNobel’s leading digital color identification and retrieval application. Meanwhile, the company’s Wanda brand will continue to be supplied in China, with plans to supply Sikkens and Lesonal globally.

Adds Bourguignon: “We look forward to supporting BYD with its pioneering work in the eMobility space, while underlining our own commitment to halving our carbon emissions across the full value chain by 2030.”

We remind, AkzoNobel bolsters its performance coatings portfolio after reaching an agreement to acquire the wheel liquid coatings business of Lankwitzer Lackfabrik GmbH. Completion of which is subject to regulatory approvals, is expected before end-2022. Lankwitzer's Rims and Wheel business operates out of a manufacturing site in Leipzig, Germany. Its products are approved for use by car manufacturers such as Daimler, Audi, VW, Opel, Fiat and Renault.

AkzoNobel is a Dutch multinational company that manufactures paints and performance coatings worldwide. Headquartered in Amsterdam, the company operates in over 80 countries and employs approximately 35,700 people. Turnover in 2017 amounted to 9.61 billion euros.


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