Celanese cuts dividend by 95%, implements cost-cut plans after profit slump

Specialty chemicals company Celanese, opens new tab cut its quarterly dividend by about 95% and laid out additional cost-cut plans following a profit slump, sending its shares down 14% in extended trading on Monday, said Reuters.

Third-quarter net earnings fell about 87% to USD120 million, as its engineered materials segment was impacted by rapid slowdowns in commercial activity in both automotive and industrial segments.The company said the temporary dividend reduction, beginning in the first quarter of 2025, was a prudent and cost-effective path forward to support deleveraging, and its plans to cut additional costs would help it save more than $75 million by the end of 2025.

CEO Lori Ryerkerk said the teams executed value enhancing initiatives and made improvements but "these actions have been increasingly offset in the current environment and the earnings generated fell short of our expectations."Last month, peer Dow, opens new tab, which is set to be replaced by Sherwin-Williams, opens new tab in the Dow Jones Industrial Average, forecast fourth-quarter revenue below market expectations and started review of some of its European assets as the company grapples with sagging demand.

Celanese also said it was "reducing manufacturing costs through the end of 2024 by temporarily idling production facilities in every region and driving cash generation through an expected USD200 million inventory release in the fourth quarter."The company forecast fourth-quarter adjusted profit of USD1.25 per share, below average analysts' expectations of USD2.93 per share, according to data complied by LSEG, as the company expects demand conditions to worsen.

Celanese makes chemical products that are used in coatings, paints and pharmaceutical products and polymers.
The chemicals industry, which had previously been dealing with high inventory that led to destocking, is now facing weaker demand in key markets such as China and Europe.

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Novonix Ltd. (Brisbane, Australia) and Stellantis NV (Amsterdam), a leading global automotive company, have signed a binding offtake agreement for a minimum of 86,250 metric tons, up to a target volume of 115,000 metric tons of synthetic graphite material, said Chemweek.

The material will be supplied to Stellantis’ cell manufacturing partners in North America over a six-year term starting in 2026 from Novonix’s Riverside facility at Chattanooga, Tennessee, and a planned expansion site.

Novonix said its Riverside facility is poised to become the first large-scale production site dedicated to synthetic graphite for the battery sector in North America and is slated to begin commercial production in 2025, with plans to grow output to 20,000 metric tons per year to meet current customer commitments.

Previously, the company announced the US Department of Energy (DOE) Office of Manufacturing and Energy Supply Chains awarded it a $100 million grant and selected it for a $103 million investment tax credit toward the funding of the Riverside facility.

Novonix is also progressing plans to build a new production facility in the US that will have an initial capacity of 30,000 metric tons per year and plans to expand that facility to 75,000 metric tons per year. Novonix said it remains in discussions with the DOE Loan Program Office for an Advanced Technology Vehicles Manufacturing Program loan to support the construction of this new production facility.

Novonix’s current plans call for total production to increase to at least 150,000 metric tons per year of synthetic graphite material to accommodate anticipated customer demand.

Stellantis is one of the world’s leading automakers, with plans to invest more than €50 billion over the decade in electrification to meet its targets of reaching 100% passenger car battery-electric vehicles. Stellantis is securing approximately 400 GWh of battery capacity, including support from battery manufacturing plants in North America and Europe.

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Toray Industries Inc. has signed a memorandum of understanding with PTT Global Chemical Public Co. Ltd. (PTTGC, Bangkok) to explore mass production technology for adipic acid made from nonedible biomass, said Chemweek.

The companies will jointly evaluate the feasibility of mass production technology and commercialization in Thailand and Japan.

If business is determined to be viable, they aim to manufacture several thousand metric tons of bio-based muconic and adipic acid annually by 2030 from agricultural waste in Thailand.

Last year, both companies began jointly developing technology to produce these raw materials for nylon-6,6 from nonedible biomass-derived sugars made at Cellulosic Biomass Technology Co. Ltd., in which Toray has an 84% stake.

Toray said PTTGC employs its proprietary fermentation technology to convert nonedible sugars into high yields of muconic acid. Toray uses its hydrogenation process to produce high yields of high-purity bio-adipic acid from muconic acid. The resulting bio-based adipic acid can serve as a raw material for nylon-6,6 for resins and fibers similar to petroleum-derived nylon-6,6.

Toray said the manufacturing process does not generate nitrous oxide, a greenhouse gas byproduct typically associated with chemical synthesis-based processes.

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Indian Oil Corp.'s Gujarat refinery operations were unaffected after a benzene storage tank caught fire, India's top refiner said in a statement, as per Reuters.

The fire occurred around 3:30 PM IST on Monday, and the cause of the fire is yet to be ascertained, IOC said.

IOC runs a 13.7-MMtpy integrated refinery-cum-petrochemical complex in Gujarat.

Indian Oil Corporation (IOC) plans to increase its petrochemical production capacity to 14 million tonnes per annum by 2030. The total investment in the petrochemical industry will reach Rs 1.2 trillion. The company's current petrochemical production capacity is 4.28 million tonnes per annum.

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Neste’s Rotterdam refinery has been shut down due to a fire on 8 November 2024. The fire has been extinguished and did not cause any injuries, as per Hydrocarbonprocessing.

Neste is currently investigating the incident and the repair work will start as soon as possible. Based on the company’s initial assessment, the Rotterdam refinery production will be down for several weeks impacting the renewable diesel customer deliveries.

The revised 2024 guidance for renewable products is: “Renewable Products’ total sales volume is expected to increase from 2023 and to reach approximately 3.7 MMt (+/- 5%) in 2024, out of which sustainable aviation fuel (SAF) sales volume is expected to be 0.35 MMt–0.55 MMt. Renewable Products’ full-year 2024 average comparable sales margin is expected to be in the range of $360/t–$480/t”.

The previous 2024 guidance for Renewable Products was: “Renewable Products’ total sales volume is expected to increase from 2023 and to reach approximately 3.9 MMt (+/- 5%) in 2024, out of which SAF sales volume is expected to be 0.35 MMt–0.55 MMt. Renewable Products’ full-year 2024 average comparable sales margin is expected to be in the range of $360/t–$480/t”.

“We are mitigating any impacts on our renewable diesel customers. The incident has no effect on the ongoing Rotterdam refinery expansion project,” said Hanna Maula, Vice President, Communications and Brand, Neste Corporation.

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