By David Reed UT contributing editor
The Woodlands, Texas-Huntsman Corp, parent of the Huntsman Polyurethanes business, reported an $83-million loss in the third quarter of the year on sales up 4 percent to $2686 million, according to a 27 Oct. press announcement.
A loss of $29.9 million was reported for the same period last year, but income in the second quarter of this year was $262.9 million, the firm's announcement added.
The loss in the third quarter this year was largely attributed to the previously announced sale of its European petrochemicals business to SABIC (Saudi Basic Industries Corp.), the statement said. This deal, expected to close by the end of the year, will see SABIC pay $700 million to Huntsman, as well as assuming $126 million in pension liabilities.
Excluding the impact of discontinued operations and other charges, adjusted net income from continuing operations was $87.3 million, the firm reported.
The polyurethanes business of the firm, largely centred on MDI (methylene diphenyl diisocyanate), reported progress, with revenues in the third quarter at $885.4 million up over 6 percent on the same period last year. Huntsman data showed that polyurethane revenues for the first three quarters of this year were only slightly ahead of the same period last year, at$2619.6 million versus $2609.9 million by 30 Sep 2005.
EBITDA (earnings before interest, income taxes, depreciation and amortisation) in the segment was down over 30 percent, at $134.9 million for the third quarter, yielding an 11.3-percent decline to $474.6 million for the three quarters ending 30 Sep.
Commenting on the results, Peter Huntsman, the firm's President and CEO, said, "In the third quarter, we continued to experience strong demand for many of our product offerings-including MDI, where our sales volumes were up 16 percent … compared to the third quarter of last year. We expect this growth to continue into 2007, particularly in these and other products in our differentiated portfolio, where we are projecting meaningful earnings growth in 2007 as compared to 2006.
"The recent declines that we have seen in raw materials and energy prices, if sustained, will provide further opportunities to expand our margins across most product lines," his statement added.
"The increase in revenues in the polyurethanes segment for the three months ended September 30, 2006 compared to the same period in 2005 was primarily due to higher MDI sales volumes," Peter Huntsman further commented.
"MDI sales volumes increased 16 percent as a result of continued strong demand in all geographic markets, particularly in Asia," he added, commenting that this was "partially offset by a 3-percent decrease in average MDI selling prices due to new industry capacity [coming on stream]."
The decrease in EBITDA in the polyurethanes segment was primarily the result of lower MTBE (methyl tert. butyl ether) margins and lower margins [on other products] due to higher raw material costs, the Huntsman statement said. During the three months ended 30 Sep 2006 the polyurethanes segment had restructuring and plant closing costs of nil compared to $0.9 million for the comparable period in 2005, the statement added.
The full results details are available at www.huntsman.com. "
