Huntsman Q2 net income up on stronger pricing, MDI, amines demand

LONDON (ICIS)–Huntsman Corporation’s net income for the second quarter of the year more than doubled to $119m from $47m during the same period in 2013, on the back of improved pricing and stronger demand for key products, the US-headquartered chemicals producer said on Wednesday.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 31% year on year to $327m, while revenues increased by 5% over the same period to $2.99bn.

Improved methyl d-p-phenylene isocyanate (MDI) and amines demand helped to buoy earnings, as did a restructuring programme for the company’s advanced materials and textile effects arms, according to company CEO Peter Huntsman.

“We saw strong earnings in the second quarter as a result of increased demand for key products such as MDI and amines and higher selling prices for many of our products. We also benefited from restructuring efforts in our Advanced Materials and Textile Effects businesses,” he said.

“These results are well in line with our earlier forecast of substantial earnings growth in the next two to three years,” he added.

Huntsman also predicts that the company’s anticipated purchase of Sachtleben, the titanium dioxide (Ti02) and performance additives business owned by US-based Rockwood Holdings, should be complete by the end of the third quarter. The European Ti02 market is currently keeping a keen eye on developments to the deal.

“We are working closely with the European Commission in its review of the proposed acquisition of Rockwood Holdings’ Performance Additives and Titanium Dioxide businesses. We have proposed certain remedies we believe address the Commission’s concerns and are confident that final approval will be secured by the end of the third quarter,” he said.

Adjusted EBITDA for the company’s polyurethanes division increased 13% year on year in the second quarter to $197m, primarily on the back of improved MDI demand and pricing in Europe and the Americas, while propylene oxide (PO) and methyl tertiary butyl ether (MTBE) pricing also improved during the period.

Second-quarter performance products adjusted EBITDA rose 4% year on year to $115m on the back of stronger margins, driven by strong market conditions for amines, maleic anhydride and specialty surfactants, the company said.

Advanced materials second-quarter adjusted earnings rose 66% to $53m, driven by lower costs as aresult of restructuring, despite lower base oils volumes during the quarter. The company closed two base resins production units in late 2013 to focus on higher-value market segments such as aerospace.

Textile effects second-quarter adjusted EBITDA rose more than sevenfold to $22m on the back of higher margins and reduced costs after restructuring, while pigments division adjusted earnings dropped 30% to $23m as lower margins offset higher volumes, Huntsman said.