The Woodlands, Texas -- Huntsman Corp.'s polyurethanes business reported Q4 2010 sales of $946 million, up 11 percent from the previous year, while full-year polyurethane sales jumped by 17 percent.
Polyurethane sales for 2010 were $3605 million, compared to $3005 million in 2009, forming 39 percent of the company's total sales, according to Huntsman's 17 Feb end-of-year report.
The Texas-based firm attributed the Q4 2010 rise in revenues in its polyurethanes unit to higher sales prices and higher sales volumes, and noted that average selling prices for both MDI (methylene diphenyl diisocyanate) and PO/MTBE (propylene oxide/methyl tertiary butyl ether) rose in accordance with higher raw material costs.
However, the division saw a decrease in adjusted earnings (EBITDA), both for the quarter and the full year, which it said was "primarily due to lower PO/MTBE contribution margins - partially offset by increased MDI earnings."
Peter Huntsman, president and chief executive officer, said in a 17 Feb conference call that the company had seen continued "strong recovery in global demand for MDI," with the MDI industry growing by over 18 percent in 2010, after dropping 4 percent in 2009.
MDI growth in 2010 made it the second best year for the product in over 20 years, he noted. Compound average growth for MDI over the last 20 years has been 7 percent, the Huntsman executive added.
He added that the company estimates that operating rates in the MDI industry were at about 90 percent in the fourth quarter, but that Huntsman's operating rates were better than the industry rates.
Peter Huntsman said that about a third of the company's MDI urethanes revenues are in insulation-related applications, and two thirds of these are in commercial and the other in residential uses. Demand in automotive was particularly strong in Asia and Europe, while adhesives and elastomer demand was strong in Asia and the Americas.
And noting that Huntsman's 2010 MDI EBITDA was nearly $70 million better than the previous year, and that demand is growing with little new capacity entering the markets in Europe and North America, Peter Huntsman said "We expect this product to continue to improve in the coming years."
He also said he expects further MDI price increases in the near future, due to an increase in raw material costs.
About 80 percent of Huntsman's revenue comes from three divisions: Polyurethanes, Performance Products and Pigments, and the polyurethanes unit has seen profits jump by 12 percent over 2010.
Looking at the company as a whole, Huntsman said Q4 revenue increased by 17 percent as a result of high average selling prices and improved recovery in global demand. The Huntsman ceo noted that the most dramatic sales growth happened in the Asia-Pacific area, which improved by 40 percent. The group's largest regions, Europe, and the US and Canada grew by 15 percent and 10 percent respectively.
Revenues for the full-year 2010 were $9250 million compared to $7665 million in 2009.
Commenting on the report, Peter Huntsman said, "This past November, we announced our expectation to achieve adjusted EBITDA of $1325 million within the next two to three years. Given current improving global economic trends, I continue to be confident that we can achieve these earnings."
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