Huntsman PU earnings fall 36 percent

By Patrick Raleigh UT On-line/news editorSalt Lake City, Utah-Huntsman Polyurethanes has posted a 36-percent drop in earnings (EBITDA) to $233 million, on 2003 sales of $2298 million, 11 percent higher than the previous year. Huntsman linked the lower earnings to a $272-million rise in raw material and energy costs, and a $28 million in restructuring charges. These extra costs were only partly offset by a $201-million increase in average selling prices, said a 30 March company statement. The restructuring costs covered the integration of Huntsman's global flexible products unit into its urethane specialties unit as well as cost reductions at its Rozenburg, the Netherlands site. Huntsman said it also incurred a $2.5-million charge for the write-off of an asset formerly used in connection with its Geismar, Louisiana, TDI plant.Sales of MDI rose by 11 percent in 2003, in-line with a rise in average selling prices, Huntsman said. MDI volumes rose by 6 percent overall, though these gains were cancelled out by a decline in the merchant market, the firm commented. Excluding the decline in spot-market sales, Huntsman's MDI volumes rose by 20 percent, 6 percent, and 2 percent in Asia, the Americas, and Europe, respectively. The market benefited, in particular, from a strong fourth quarter, the group added. Huntsman's average selling prices for MDI rose 11 percent, though, it said, this was mostly due to the strength of the Euro against the US dollar. Excluding this effect selling prices rose by just 4 percent.Huntsman's polyol sales increased by 16 percent, reflecting 4 percent higher volumes and a 12-percent rise in average selling prices, most of which (7 percent) was due to exchange rate movements. Propylene oxide revenues, meanwhile, fell 8 percent, due to the conversion of certain sales to a tolling arrangement, the group added."