Huntsman notes improving business conditions in first quarter 2017
Huntsman Corporation announced on March 27, 2017 that positive trends during the first quarter 2017 are strengthening its business.
Based on current market conditions, the firm expects first quarter 2017 adjusted EBITDA to exceed the USD 274 million of adjusted EBITDA during the same quarter in 2016. Notably, the company is seeing continued strength in its MDI urethanes business, specifically in the Asia Pacific region.
ithin our Pigments and Additives division, TiO2 price increases announced for implementation January 1, 2017 have taken effect. In addition we have been able to mitigate a portion of the impact from the outage at our Pori, Finland facility through sales of undamaged inventory such that we now expect the first quarter EBITDA impact to be less than previously anticipated.
As previously announced, on January 30, 2017 we experienced a fire at our titanium dioxide facility in Pori, Finland. Importantly there were no injuries. The site has 130000 metric tons of capacity, representing approximately 15 % of our titanium dioxide capacity and approximately 2 % of global demand. It currently is able to produce a small amount of product at the facility, and expects to be fully operational around year end 2018. It can be expected to restart portions of the facility in phases according to the following schedule:
• ~20% capacity within 2Q17
• ~40% capacity within 2Q18
• ~100% capacity around year end 2018
Huntsman is also working closely with its insurer to secure prompt reimbursement for our losses – both on the property and on the EBITDA side (for business interruption). We have already been advanced EUR 50 million. We are responsible for retained deductibles of EUR 15 million relating to property damage, and 60 days relating to lost earnings (business interruption) all within the first quarter 2017.
Peter R. Huntsman, President and CEO commented: “Results in the first quarter are looking stronger than they were in the prior year. We remain focused on delivering more than $350 million of free cash flow in 2017 and growing our downstream businesses such as differentiated MDI polyurethanes. We continue to work toward the separation of our Pigments and Additives business (identified now as Venator Materials Corporation) and are targeting the end of the second quarter this year for it to take place.”
As we prepare for the separation of Venator, we will continue to provide increased transparency to the business.
Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated chemicals with 2016 revenues of approximately USD 10 billion. Our chemical products number in the thousands and are sold worldwide to manufacturers serving a broad and diverse range of consumer and industrial end markets. We operate more than 100 manufacturing and R&D facilities in approximately 30 countries and employ approximately 15000 associates within our 5 distinct business divisions including the Pigments and Additives division that we intend to spin-off as Venator Materials Corporation.