By Liz White, UT staffSalt Lake City, Utah-In its first quarter results statement, Huntsman Corp. revealed that average selling prices for the polyurethane raw material MDI (methylene diphenyl diisocyanate) had increased by 45 percent over the price in the first quarter of 2004, giving higher margins in this segment for the raw material supplier. According to Huntsman, the MDI price surge resulted from a "combination of strong growth in higher-value applications, continued strong supply/demand fundamentals, the strength of major European currencies versus the US dollar, and higher raw material and energy costs." This major price rise enabled Huntsman's polyurethanes business to increase its Q1 revenue by nearly 42 percent to $907 million ($640 million in Q1 200), the group said. Huntsman acknowledged that its turnover increase, "was primarily due to higher average selling prices for MDI," and was accompanied by earnings (EBITDA) which rose to $185.7 million, compared to $72.7 million for Q1 2004. At the same time, MDI sales volumes rose by only 1 percent, the group added. Average selling prices for propylene oxide and its co-product MTBE were also higher, Huntsman said. Huntsman also revealed that its EBITDA increase in polyurethanes was the result of higher margins; "average selling prices more than offset the increase of raw materials and energy costs." Lower administrative costs contributed to better EBITDA, while the group recorded $1.9 million restructuring charges in Q1 2005. At its consolidated polyurethanes joint venture in China, Hunstman said it expects its to spend an additional $51 million on capital projects in 2005, with some $8 million funded by Huntsman and the rest by its partners and local borrowings. Huntsman Corp. as a whole had revenue of $3363 million for the quarter, up more than 27 percent from $2639 million in Q1 2004, and made a net loss of $56.4 million ($84.9 million Q1 2004). According to Peter Huntsman, president and ceo, "The first quarter results represent our seventh consecutive quarter of improved revenues and adjusted EBITDA." This was despite "continued volatile and high energy and feedstock costs," he added. Huntsman has now "delivered two-thirds of our $200 million global cost reduction initiative," Peter Huntsman continued, adding that the group's "outlook for 2005 remains optimistic." During Q1 "our net IPO proceeds of $1500 million were used to reduce our debt levels,' he added. "
