The Woodlands, Texas - Revenues for Huntsman Corp. for the first quarter of 2008 were $2540.4 million, an increase of 13 percent compared to revenues of $2251.9 million for the first quarter of 2007. The group's earnings (adjusted EBITDA) were $188.3 million, which is a drop of 23 percent from its earnings of $244.5 million in Q1 2007.
Huntsman commented that the Q1 earnings "were in line with our results for the fourth quarter and were achieved despite the continued escalation in prices for many of our raw material and feedstock." A further factor depressing earnings was continued decline in the value of the dollar compared to the Euro. And finally, Huntsman referred to "the impact on our customers, suppliers and employees from the uncertainties related to our pending merger."
Huntsman and Hexion Corp signed a merger deal on 12 July 2007 for an all-cash transaction valued at about $1060 million, including the assumption of debt. The transaction was approved by Huntsman shareholders on 16 Oct 2007, but in January 2008 both parties agreed to give the Federal Trade Commission in the US extra time to approve the deal.
"With respect to the pending merger with Hexion, we continue to engage in constructive discussions with the antitrust agencies regarding the regulatory approvals required to close the transaction,' said the group's, in its Q1 results statement. Huntsman also pointed out that, with the recent announcement of several senior leadership team roles for the merged company, "integration planning with Hexion has continued at an accelerated pace."
Revenues in polyurethanes rose to $1001.7 million from $840.0 million in Q1 2007, resulting from higher average selling prices and higher sales volumes, Huntsman stated.
In polyurethanes, adjusted earnings (EBITDA) improved by over 10 percent to $131.8 million compared to $118.7 million for the first quarter of last year. This was primarily the result of stronger margins in both PO (propylene oxide) and its co-product MTBE (methyl tertiary butyl ether). Huntsman said higher average selling prices and sales volumes more than offset higher raw material costs.
Average selling prices for MDI (methyl diphenyl diisocyanate) increased 8 percent, primarily due to the strength of the Euro against the dollar, as well as price increase initiatives announced in the quarter. Huntsman said these were offset by higher raw materials costs, increased fixed manufacturing and selling as well as general and administrative costs. (RD)