AkzoNobel delivers solid full-year 2023 results

AkzoNobel NV publishes results for 4Q and full-year 2023. Revenue stood at EUR 2606 M and EUR 2529 M for 4Q 2022 and 4Q 2023, respectively, a change of (3%), said the company.

Operating income stood at EUR 103 M and EUR214 M for 4Q 2022 and 4Q 2023, respectively, a change of 108%. Adjusted operating income stood at EUR126 M and EUR221 M for 4Q 2022 and 4Q 2023, respectively, a change of 75%. ROS stood at 4.8% and 8.7% for 4Q 2022 and 4Q 2023, respectively.

Revenue stood at EUR10,846 M and EUR10,668 M for FY 2022 and FY 2023, respectively, a change of (2%). Operating income stood at EUR 708 M and EUR1029 M for FY 2022 and FY 2023, respectively, a change of 45%. Adjusted operating income stood at EUR789 M and EUR 1074 M for FY 2022 and FY 2023, respectively, a change of 36%. ROS stood at 7.3% and 10.1% for FY 2022 and FY 2023, respectively.

We remind, More than 82 companies, businesses and social organizations – including AkzoNobel – are involved in a major Dutch research program focused on developing new technologies that will help solve some of today’s societal challenges. Seven broad consortia have been established as part of the government-funded “Perspectief” program, with AkzoNobel set to play a leading role in the SusInkCoat project, which will explore how to make inks and coatings more sustainable.

mrchub.com

Chemours will delay the release of its Q4 earnings by two weeks as its audit committee completes an internal review, said the company.

"The company is evaluating its internal control over financial reporting as of December 31, 2023, with respect to maintaining effective controls related to information and communications," Chemours said.

The internal review by the audit committee is related to that evaluation, Chemours said. The company did not provide more details. Chemours shares fell by 4.89% in afterhours trading.

The new release date for Chemours's Q4 results is February 28 after the markets close. It will hold its earnings conference call on February 29. Chemours makes titanium dioxide (TiO2) as well as fluorochemicals and fluoropolymers.

We remind, Chemours Company, DuPont de Nemours, Inc. and Corteva, Inc. announced their continued support for the June 30, 2023 agreement to comprehensively resolve PFAS1-related drinking water claims of a defined class2 of public water systems.

mrchub.com

Shell, opens new tab said on Tuesday it will not proceed with the Nebras petrochemical project in southern Iraq as part of its review of its operations in the sector that has seen a sharp drop in profits in recent years, said Reuters.

"After in-depth evaluation on the feasibility of the Nebras integrated petrochemicals complex with our government partners, Shell has decided not to proceed with the project," a spokesperson said in a statement.

Shell is seeking buyers for its oil refining and petrochemicals plant in Singapore.

"Shell will continue to play a vital role in Iraq's energy landscape through our partnership in the Basra Gas Company (BGC) joint venture as the main gas processing entity in Iraq," the company said.

We remind, in early February, Royal Dutch Shell, a prominent Anglo-Dutch oil and gas company, declared force majeure concerning the supply of butadiene to its facility in Norco, Louisiana, USA. Market reports have confirmed the shutdown of a line with a substantial capacity of 265,000 tonnes of butadiene annually. This operational halt is anticipated to persist at least until the conclusion of February, with the precise cause of the disruption remaining undisclosed.

mrchub.com

PTT Global Chemical's (PTTGC) net profit surged to Thai Baht (Bt) 5.08bn in the fourth quarter on higher sales and gains from its sale of shares of GC Logistics Co (GCL), said the Thailand-based producer.

PTTGC in the fourth quarter of last year approved the sale of a 50% share in subsidiary GCL to Thailand-based logistics and industrial facilities firm WHA Venture Holding Co in a deal worth around Bt2.64bn. Sales volumes increased in the fourth quarter of the year on strong refining operating rates.

"However, the average crude oil price and petrochemical prices declined across all products [in the fourth quarter], reflecting the slow economic recovery," the company said in a statement. On a quarter-on-quarter basis, adjusted earnings before interest, tax, depreciation and amortization (EBITDA) at the polymers and chemicals unit fell by 53% in the last three months of 2023, weighed by poorer sales volumes and higher plant turnarounds.

For the whole of 2023, sales fell by 9.1% year on year due to price decreases in its petroleum and petrochemical products due to the ongoing global economic recession "that has not yet recovered", it said. Petrochemical product spreads declined during 2023, especially in its intermediates business as well as its polymers and chemicals business which was affected by new capacity start-ups and the global economic slowdown.

The company also reported a share of loss from investments at Bt725m in comparison with the gain of Bt2,908 the previous year as the petrochemical business encountered a downturn in overall performance. Earnings at PTTGC's Polymers & Chemicals business declined from the previous year due to the decrease in spread of plastic resins products, especially polyethylene (PE), which declined by 19% year on year, driven by ongoing economic slowdown, high inflation, economic regression, and oversupply, resulting from the continuous introduction of new production capacities from China.

"We expect around 21% year on year growth in EBITDA in 2024 on the back of a higher share of low-cost ethane feedstock, some recovery of petrochemical spreads, and a gradual improvement in the business environment for PTTGC’s specialty chemicals subsidiary Allnex," Japan's Nomura Global Markets Research said in a note on Wednesday.

We remind, credit watchdog Moody's Investors Service has cut the ratings of Thailand's PTT Global Chemical Public Company (PTTGC) because of the company's relatively high debt and weak global demand for petrochemicals, said the agency. PTTGC’s leverage has been driven by weak earnings over the past 12 months, combined with the primarily debt-funded acquisition of resin producer Allnex Holding GmbH, Moody’s said. PTTGC completed the €4bn acquisition of Germany-based Allnex in December 2021.

mrchub.com

In the week ending February 9, the average capacity utilization at paraxylene plants in China experienced a notable increase, rising by 1% compared to the previous week, said Chemanalyst.

This uptick in capacity utilization reflects the operational efficiency and production levels within the Chinese paraxylene manufacturing sector, reaching an average utilization rate of 82%.

A closer look at the recent developments in China's paraxylene market reveals insights into the country's import dynamics. In December, China recorded a total import volume of 692.83 thousand tons of paraxylene. However, this figure reflects a 14% decline when compared to the corresponding period in December 2022. Additionally, there was a 12% reduction in paraxylene imports from November 2023, where the import volume stood at 787.47 thousand tons. South Korea, Japan, and Brunei emerged as the primary suppliers of paraxylene to China during this period.

Analyzing the broader picture, the cumulative volume of paraxylene imports to China throughout the entirety of January to December 2023 reached approximately 9.1 million tons. This data underscores the significant role that international suppliers, particularly those from South Korea, Japan, and Brunei, play in meeting China's demand for paraxylene.

The rise in average capacity utilization at Chinese paraxylene plants suggests a positive trend in the domestic production landscape. This increase aligns with the country's ongoing efforts to enhance its self-sufficiency and operational efficiency in the production of key chemical components like paraxylene. The 1% rise in capacity utilization is indicative of a productive and well-functioning manufacturing sector in China.

It is essential to recognize the interconnected nature of the global paraxylene market, with China serving as a key player in both production and consumption. The fluctuations in import volumes highlight the dynamics of international trade and the dependencies that nations have on each other to meet their specific industrial requirements. The lower import volumes in December compared to the previous year could be attributed to various factors, including changes in domestic demand, market conditions, or strategic decisions made by suppliers and buyers.

South Korea, Japan, and Brunei emerge as prominent contributors to China's paraxylene supply chain during the examined period. These countries play a pivotal role in meeting China's demand for paraxylene, emphasizing the importance of strong trade relations and supply chains in the global chemical industry.

The intricate balance between domestic production and international trade in paraxylene reflects the complexity of the chemical industry and the strategic considerations that nations must take into account. China's efforts to boost domestic production while engaging in international trade partnerships underscore the multifaceted nature of its approach to meeting the demands of its chemical sector.

We remind, on December 20th, 2023, the Tariff Commission of China's State Council announced a suspension of tariff concessions on specific products covered by the Cross-Strait Economic Cooperation Framework Agreement. Beginning January 1, 2024, tariff rates for 12 imported products, including Paraxylene (PX) from Taiwan, will no longer receive concessions. The current 0% tariff on Paraxylene will be adjusted to 2%. This new 2% tariff will be applicable on Paraxylene imports from Taiwan, same as that from other countries expect for the ASEAN market.

mrchub.com