US Trinseo swings to Q4 net loss on lower sales, higher costs

Source: ICIS News

2019/02/13

HOUSTON (ICIS)--US-based styrenics producer Trinseo posted on Wednesday a Q4 net loss of $900,000 from a net income of $117.6m in the same quarter of the previous year as sales fell and costs rose.

Quarterly performance ($m) Q4 2018 Q4 2017 % Change
Net sales 1,065.0 1,101.8 -3.3
Cost of sales 1,005.7 935.5 7.5
Gross profit 59.3 166.3 -64.3
Other expenses (income) 0.7 -21.5
Net income (loss) -0.9 117.6

For the year, 2018 net income fell as costs rose faster than sales.

Full-year performance 2018 2017 % Change
Net sales 4,622.8 4,448.1 3.9
Cost of sales 4,094.0 3,807.8 7.5
Gross profit 528.8 640.3 -17.4
Net income (loss) 292.5 328.3 -10.9

KEY POINTS

- Q4 net sales fell on lower volumes in Feedstocks, Performance Plastics and Synthetic Rubber segments, as well as currency.

- Q4 2017 pre-tax gain related to pension plan changes and business service transition from Dow Chemical. Q4 2018 loss related to labour reduction in Synthetic Rubber.

- Other headwinds included customer destocking and delayed orders on China dynamics and falling prices, weakness in auto and tyre markets, and impacts from unplanned Terneuzen styrene outage in The Netherlands.

Net sales by segment ($m) Q4 2018 Q4 2017 % Change
Latex binders 254.8 250.3 1.8
Synthetic rubber 130.3 126.8 2.8
Performance plastics 361.4 308.6 17.1
Polystyrene 239.6 241.3 -0.7
Feedstocks 78.9 102.8 -23.2

OUTLOOK

- Late 2018 market conditions impacting Q1 business but showing signs of improvement in many products.

- Raising full-year 2019 guidance.

2019 guidance Current Previous
Net income $318m $248m
Diluted EPS $7.43 $5.80
Adjusted EBITDA $580m $500m
Adjusted EPS $7.43 $5.80

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