Huntsman announces first quarter 2023 earnings
Huntsman Corporation reported first quarter 2023 results with revenues of $1,606 million, net income attributable to Huntsman of $153 million, adjusted net income of $37 million and adjusted EBITDA of $136 million.
Peter R. Huntsman, Chairman, President, and CEO, commented: “The first quarter was in-line with our expectations as we saw quarter over quarter improvement in all three of our business segments. The headwinds on demand we saw the past two quarters have continued into the second quarter, specifically in North American construction, but we have seen sequential improvements in China and Europe, and we will be primed for an overall business recovery as construction demand and inventory levels continue to normalize. Our balance sheet is strong and provides us flexibility in the current environment to continue returning cash to our shareholders as well to consider investments, including bolt-on acquisitions, to strengthen our company for the long term.”
Segment Analysis for 1Q23 Compared to 1Q22
Polyurethanes
“The decrease in revenues in our Polyurethanes segment for the three months ended March 31, 2023 compared to the same period of 2022 was primarily due to lower sales volumes, lower MDI average selling prices and the negative impact of weaker major international currencies against the U.S. dollar. Sales volumes decreased primarily due to lower demand, particularly in our European and Americas regions. The decrease in segment adjusted EBITDA was primarily due to lower sales volumes, lower MDI margins, the negative impact of weaker major international currencies against the U.S. dollar and lower equity earnings from our minority-owned joint venture in China, partially offset by cost savings achieved from our cost optimization program.”
Performance Products
“The decrease in revenues in our Performance Products segment for the three months ended March 31, 2023 compared to the same period of 2022 was primarily due to lower sales volumes, partially offset by improved sales mix. Sales volumes decreased in all regions primarily due to slowing construction activity, reduced demand in coatings, adhesives, lubes and other industrial markets as well as inventory destocking. The decrease in segment adjusted EBITDA was primarily due to decreased sales volumes.”
Advanced Materials
“The decrease in revenues in our Advanced Materials segment for the three months ended March 31, 2023 compared to the same period of 2022 was primarily due to lower sales volumes, partially offset by higher average selling prices. Sales volumes decreased primarily due to reduced customer demand in our infrastructure markets and the deselection of lower margin business. Average selling prices increased largely in response to higher raw material, energy, and logistics costs as well as improved sales mix. The decrease in segment adjusted EBITDA was primarily due to lower sales volumes.”
Corporate, LIFO and other
For the three months ended March 31, 2023, adjusted EBITDA from Corporate and other was a loss of $49 million as compared to a loss of $50 million for the same period of 2022.
Liquidity and Capital Resources
During the three months ended March 31, 2023, our free cash flow from continuing operations was a use of cash of $168 million as compared to a source of cash of $3 million in the same period of 2022. As of March 31, 2023, we had approximately $2 billion of combined cash and unused borrowing capacity.
During the three months ended March 31, 2023, we spent $46 million on capital expenditures from continuing operations as compared to $64 million in the same period of 2022. During 2023, we expect to spend between $240 million to $250 million on capital expenditures.
Income Taxes
In the first quarter of 2023, their effective tax rate was 20% and their adjusted effective tax rate was 19%. They expect our 2023 adjusted effective tax rate to be approximately 24% to 26%. They expect their long-term adjusted effective tax rate to be approximately 22% to 24%.
