US Celanese income drops 36.4% from 2014

A decline in net sales year on year reduced net income for Celanese, but the company’s new giant methanol plant in Clear Lake, Texas, should solve feedstock cost issues in the future. (USA/REX Shutterstock)

HOUSTON (ICIS)–Celanese on Monday reported net income for the third quarter that was 36.4% lower than the same period in 2014, even as the company touted the start-up of the largest methanol facility in the US.

Net income fell to $161m, from $253m in the same quarter of 2014, as net sales fell by 20.1%, to $1.413bn in the third quarter from $1.769bn in the same period a year ago.

“We are confident in the ability of our complementary businesses to drive unique value despite dramatic year-over-year currency headwinds, stress in global macroeconomic environments, and the recent slowdown in China,” CEO Mark Rohr said in a prepared statement. “Our focus on those things we control and our unrelenting drive to create customer value allow us to match market needs on moderate macroeconomic trends. For the year, we are increasing our 2015 adjusted earnings outlook range to $5.90 to $6.10 per share.”

The 1.3m tonne/year Clear Lake methanol plant in Texas is a joint venture with Japan-based Mitsui.

“This strategic investment provides us with certain supply of a critical raw material, allowing us to capture the economic benefit of abundant low cost U.S. natural gas,” Rohr stated in the company’s earnings release. “By leveraging existing infrastructure and executing an aggressive project plan, we completed the methanol unit and reached full operating rates in only 21 months at a capital cost of under $700 per ton, an impressive accomplishment and testament to our ability to execute on our strategic goals.”

The company said its acetyl chain business, which includes methanol, acetic acid and vinyl acetate monomer (VAM), was down during the quarter because of higher US methanol costs.

“The higher methanol costs were driven by the expiration of an advantaged long-term supply contract at the end of the second quarter,” the company said. “Sequentially, volume declined by 2% and price decreased 2% primarily due to normal seasonality in emulsion polymers and continued muted demand in China.”