11 February 2014 13:21 [Source: ICIS news]
LONDON (ICIS)--US-headquartered specialty chemicals producer Huntsman’s net income for the fourth quarter of 2013 swung to a $41m gain, compared to a $40m loss during the same quarter the previous year, the company said on Tuesday.
With revenues up across most divisions year on year and for the group as a whole, at $2.71bn compared to $2.62bn in the fourth quarter of 2012, the company attributed a strong quarter to restructuring efforts concentrating focus on key markets.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) more than doubled year on year to $225m, while adjusted EBITDA of $313m represented a record for fourth-quarter earnings, according to CEO Peter Huntsman.
“Aggressive self-help measures that have re-focused our efforts on key markets and lowered our costs are yielding benefits to the bottom line. These restructuring efforts are expected to contribute an additional approximate $60m of future EBITDA,” he said.
He added that approvals for the company’s $1.1bn acquisition of US producer Rockwood Holdings’ performance additives and titanium dioxide (TiO2) business is proceeding well, and the company remains on-track to close it in the first half of the year. The deal also includes the assumption of around $225m in pension liabilities.
“[We] remain confident in our ability to deliver synergies of $130m [from the deal]. Antitrust review in the US is complete and we are making positive strides as it relates to the European Union review,” Huntsman added.
Rockwood acquired full control of TiO2 joint venture Sachtleben – which was loss-making at the time of the deal – from Finnish partner Kemira in Febrary 2013 to give it more flexibility in divesting the business.
Polyurethanes division revenues increased year on year on the back of higher sales volumes and a favourable sales mix, which helped to offset lower average selling prices. Methyl di-p-phenylene isocyanate (MDI) urethanes sales were up 8% year on year, while propylene oxide (PO) and methyl tertiary butyl ether (MTBE) sales volumes decreased.
Performance products division revenues were also up year on year due to higher sales volumes for all products except European home care surfactants, although average selling prices fell in response to lower raw materials costs, which worked out to higher margins overall, the company said.
Advanced materials product revenues were down year on year during the quarter on the back of lower sales volumes more than offsetting higher prices. The volume drop was attributed primarily to the base resins business, which has been a focus of restructuring. The company closed two base resins production units during the quarter.
Textile effects and pigments division revenues both rose year on year despite lower average selling prices for pigments, Huntsman added.
Full-year 2013 EBITDA was down 25% compared to 2012 at $889m on the back of lower pigments and PO/MTBE earnings, while net income for the year was $128m compared to $363m in 2012.
Peter Huntsman added that restructuring, expansion and acquisitions are likely to increase group earnings in future.
“We are investing for long term growth and are progressing well with the previously disclosed projects that will further increase our future EBITDA by nearly $200m. We are enthused by the positive developments taking place within our business,” he said.
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