Lower MDI prices hit Huntsman’s PU revenues

The Woodlands, Texas – Huntsman Corporation has reported revenues of $2,236 million for the fourth quarter of 2018. This represents a net loss of $315 million, with an adjusted net income of $123 million, and adjusted EBITDA of $275 million.

The company's 2018 net income of $650m compares to $741m in the previous year. However, the adjusted figures indicated an increase, with 2018 adjusted net income of $808m, up from $604m in 2017. Adjusted EBITDA for the full year of $1,469m compares to $1,259m in 2017, a 16.7% increase.

Revenue decreased for the polyurethanes segment for the last three months of 2018, compared to the previous year’s fourth quarter. The company said this was primarily a result of lower average selling prices for MDI, partially offset by higher sales volumes. The main reason for this fall was a decline in component MDI selling prices in China and Europe, the company said.

MDI sales volumes rose after the start-up of Huntsman’s new Chinese MDI facility in 2018, and also following the April 2018 acquisition of spray polyurethane foam business Demilec in North America.

The fall in EBITDA was largely caused by lower MDI margins driven by pricing, the company said. This was, again, partially offset by higher sales volumes, it added.

‘In spite of strong customer destocking brought about by seasonal slowness, falling crude prices and economic uncertainties, our results reflect one of our strongest fourth quarters in our history,’ said Peter Huntsman, the company’s chairman, president and CEO. ‘We will continue to globalise recent investments, focus on our higher growth markets, and expand on our downstream businesses.’

He added that the company plans to continue investing to support its core long-term growth. This includes the new MDI splitter being built at its facility in Geismar, Louisiana. ‘2019 will be another year of strong free cash flow generation and growth in our downstream businesses,’ he said.