The Woodlands, Texas - Huntsman Corp. made a loss in its third quarter (Q3) results, but overall its results were stable, the company said 6 Nov.
Huntsman's polyurethanes business recorded revenues of $1096 million in Q3 2008, up from $974.4 million for the same period in 2007, but saw earnings (EBITDA) drop from $172.8 million in Q3 2007 to $89.3 million for Q3 2008. The company said the increase in revenues was due to higher average selling prices and higher sales volumes. MDI (methylene diphenyl diisocyanate) average selling prices increased by 6 percent, but sales volumes decreased by 2 percent. Despite strong growth in Europe, lower volumes were recorded in the US as a result of hurricane impact, Hunstman pointed out.
Huntsman said that in urethanes, higher MDI selling prices were more than offset by higher costs for raw materials as well as increased costs due to the strength of the Euro against the dollar. The company estimates a financial impact of around $39 million in its Polyurethanes division as a result of Hurricanes Gustav and Ike.
Net loss for the quarter was $20.2 million compared with a $150.0 million net loss in Q3 2007 whilst adjusted net loss from continuing operations was down from $80.0 million for the same period last year to $1.9 million in Q3 2008.
Huntsman estimates it incurred $49 million of costs and lost profit margin as a result of the hurricanes in Q3 2008, resulting in Q3 earnings (adjusted EBITDA) OF $193.9 million compared with $240.2 million in Q3 2007. Revenues increased by 13 percent to $2730 million from $2424 million in 2007, a 6 percent decrease on Q2 2008.
"I am pleased with the third quarter results. Excluding the approximately $49 million impact of Hurricanes Gustav and Ike, our adjusted EBITDA was in line with prior year results and significantly greater than the previous quarter. Our swift and sustained efforts begun earlier this year to increase selling prices have proven effective and are reflected in this quarter's results, as each of our divisions realised currency adjusted increases in their average selling prices."
"During the quarter we continued to see significant headwinds in the form of high raw material and energy costs measured on a sequential year-over-year basis. We note however that crude oil and natural gas prices have retreated and we are optimistic that this relief will work its way through the value chain and into our costs in the coming months," said Huntsman president and ceo Peter Huntsman.
With regard to the Huntsman and Hexion merger, the company noted the following:
• 29 Sept - Delaware Court of Chancery ruled in favour of Huntsman and ordered Hexion Specialty Chemicals to complete the agreed merger
• 13 Oct - Texas court imposes a temporary injunction on Credit Suisse and Deutsche Bank who had earlier agreed to fund the merger. Trial date has been set for 9 Feb 2009
• 27 Oct - Credit Suisse and Deitsche Bank notify Hexion they are not prepared to close the merger citing solvency concerns over the proposed new company. Hexion sues the banks in New York state court to force banks to commit the agreed funding. A trial date has been set for 8 Jan 2009