The Woodlands, Texas - Second quarter earnings (EBITDA) in polyurethanes at Huntsman Corp. were up 19 percent at $170 million, on sales of $1.3 billion.
PU sales, which accounted for 42 percent of the company's Q2 revenue, increased by 12 percent in the three months ended 30 June, the chemical company said in its 1 Aug quarterly report.
"More than 40 percent of our adjusted EBITDA was derived from our polyurethanes business, which experienced double digit growth globally for our MDI (methylene diphenyl diisocyanate) products. Margins in that business improved as well," commented ceo Peter Huntsman.
Huntsman attributed the increase in sales due to higher sales volumes, partially offset by lower average selling prices. MDI sales volumes increased as a result of improved demand in all regions and across most major markets.
PO/MTBE (propylene oxide/methyl tertiary butyl ether) average selling prices decreased primarily in response to lower raw material costs.
Huntsman cfo Kimo Esplin noted that the growth in polyurethanes is led mainly by insulation, such as "conservation and retrofit of existing buildings, with spray-on foam and panel polyurethane insulation." He added, "Our observation has been that it's decoupled a bit from GDP."
Esplin noted that Huntsman expects the MDI market to grow by about 7 percent going into the next quarter, but noted "maybe that will accelerate, given the focus on insulation." Insulation now represents roughly 40 percent of Huntsman's sales demand in MDI polyurethanes, and "we see that growing above that 7 percent trend line over 20 years," he commented.
Peter Huntsman reiterated in the conference call that Huntsman is committed to its planned Chinese MDI facility which has been held up due to government approval and regulation.
For the company overall, earnings for the quarter were up 14 percent to $365 million on sales of $2.9 billion, while Q2 net income rose 9 percent to $124 million.
"We experienced a solid second quarter, particularly in the quality of our earnings. Net income, adjusted EBITDA, and adjusted diluted income all increased compared to the prior year," noted Peter Huntsman, chief executive.