The Woodlands, Texas – Huntsman saw (EBITDA) Earnings before interest, tax depreciation and amortisation in its polyurethanes business fall to $105m in the first quarter of 2015 compared with $167m in Q1 2014, Peter Huntsman, president, told analysts in a conference call.
Huntsman polyurethane EBITDA hits $105m in Q1 2015
Peter Huntsman said the drop was due to lower PO/MTBE earnings after a delayed restart of its Port Neches, Texas facility in April. This lead to a fall in earnings of $60m out of a total $73m reduction in EBITDA in the PO/MTBE section of the business, Huntsman said. The remainder was due to weak margins in the business.
However, EBITDA in the MDI portion of the business rose by $11m compared with Q1 2014, despite the stronger dollar making exports more expensive.
The firm saw volume growth in the US and Europe driven by construction, insulation and automotive end use markets. Europe is still the region “where we sell most products,” Peter Huntsman said. He added that he was “encouraged by green shoots. The positive trends in Europe helped offset slower than expected growth in Asia.”
Peter Huntsman told analysts that this was going to be a better year for margins in MDI. “We’re going to focus on the right markets, the right pricing and the right relationships,” he added.
Plant operating rates are in the low 90%s “and the market is improving”; in Europe “it feels like we’re in the mid-to-upper 80% capacity” and Asia is “similar to Europe,” Huntsman said.
He estimated that 60-70% of Huntsman’s business is further downstream and “dependent on formulations and downstream blending” which makes the margin less dependent on plant utilisation rates.
Peter Huntsman said that the Geismar, Louisiana MDI plant will reach 500kT/year capacity by the end of the fourth quarter of 2015 which should yield around $30m/year EBITDA, he added.
An expansion in the Netherlands is planned for 2017, also the size of the splitter in Caojiang, China should be doubled in the second half of 2017, subject to local clearances and permits, said Huntsman .