MOSCOW (MRC) -- Huntsman expects a sharp drop in its first quarter adjusted earnings, much of which will occur in its polyurethanes (PU) segment, said the company.
The following table shows the company's forecasts for adjusted earnings before interest, tax, depreciation and amortisation (EBITDA).
It compares the forecasts with the company's performance in Q1 2022 and Q1 2021. Figures are in millions of dollars.
In the PU segment, tough market conditions have led Huntsman to idle two production lines that make methylene diphenyl diisocyanate (MDI) in the US and Europe. Huntsman warned that Europe is in a recessionary environment, and energy costs remain high despite recent declines.
In Asia, Huntsman is seeing early signs of a recovery as China continues to reopen following the end of its zero COVID-19 policies. Signs of the recovery are appearing in the cold chain, which refers to the refrigerated logistical network that keeps food, beverages and other goods cold from the point of production to the point of consumption.
Such logistical networks require insulation to keep the goods cold and PU is a powerful insulator. Other recovering end-markets in China include infrastructure and individual consumer markets such as furniture.
China's outlook is critical for the PU segment because it is the world's largest market for MDI, accounting for more than 40% of global capacity and demand, Huntsman said. For China in general, Huntman expects that consumer goods and the automobile industry will recover the soonest, while infrastructure and other end-markets connected to government stimulus could stage a more gradual recovery. Exports could remain relatively weak, they said.
We remind, Huntsman Corporation announced that it has secured all regulatory approvals required to complete the sale of its textile effects division to Archroma, a portfolio company of SK Capital Partners, said the company.
Both parties expect the transaction to close 28 February. The agreed purchase price was USD593m in cash plus assumed pension liabilities, and Huntsman expects the net after tax cash proceeds to be approximately $540m before customary post-closing adjustments.