FOR IMMEDIATE RELEASE
April 29, 2014
Huntsman Releases First Quarter 2014 Results; Demonstrates Broad Earnings Strength Across Division As Adjusted EBITDA Improves 50% Compared to Prior Year
First Quarter 2014 Highlights
• Adjusted EBITDA was $329 million compared to $220 million in the prior year period, an improvement of 50%.
• Adjusted diluted income per share was $0.43 compared to $0.19 in the prior year period.
• Net income attributable to Huntsman Corporation was $54 million compared to net loss of $24 million in the prior year period.
THE WOODLANDS, Texas – Huntsman Corporation (NYSE: HUN) today reported first quarter 2014 results with revenues of $2,755 million and adjusted EBITDA of $329 million.
Peter R. Huntsman, our President and CEO, commented:
“Our first quarter results demonstrated broad earnings strength as all of our businesses exceeded the previous year with the exception of PO/MTBE. The benefits of our previous year's restructuring efforts are visible in both our Advanced Materials and Textile Effects results. We continue to see strong results in our Performance Products and MDI polyurethanes, which make up the core of our earnings.
We remain actively engaged with the European Union in their antitrust review of our proposed acquisition of Rockwood Holding's Performance Additives and Titanium Dioxide businesses.
This past month, at our Investor Day we presented a plan to achieve $2 billion of Adjusted EBITDA within the next 2-3 years. With these strong first quarter results, we're well on our way to achieving this target.”
Segment Analysis for 1Q14 Compared to 1Q13
The increase in revenues in our Polyurethanes division for the th
ree months ended March 31, 2014 compared to the same period in 2013 was primarily due to higher sales volumes partially offset by lower average selling prices. MDI sales volumes increased 6% as a result of improved demand in all regions and across most major markets whereas PO/MTBE sales volumes were essentially unchanged. PO/MTBE average selling prices decreased primarily due to less favorable market conditions and MDI Urethane average selling prices were essentially flat. The decrease in adjusted EBITDA was due to lower PO/MTBE margins partially offset by an increase in MDI Urethane earnings.
The increase in revenues in our Performance Products division for the three months ended March 31, 2014 compared to the same period in 2013 was due to higher sales volumes and higher selling prices partially offset by the mix effect of more toll business. Sales volumes increased primarily due to the impact of the scheduled maintenance on our olefins and ethylene oxide facilities in Port Neches, Texas in the first quarter of 2013, as well as improved demand for amines and maleic anhydride. Average selling prices increased, notably for maleic anhydride and surfactants, in response to higher raw materials costs. The increase in adjusted EBITDA was primarily due to the impact of our scheduled maintenance in the first quarter of 2013, estimated at $55 million.
The decrease in revenues in our Advanced Materials division for the three months ended March 31, 2014 compared to the same period in 2013 was primarily due to lower sales volumes, partially offset by higher average selling prices and favorable sales mix. Sales volumes decreased in our base resins business primarily due to our restructuring efforts. During the fourth quarter 2013 we closed two of our base resins production units as we focus on higher value component and form
ulations sales such as aerospace, transportation and industrial markets. Average selling prices increased in all regions primarily due to increased prices for certain products as well as an increased focus on higher value component and formulations sales. The increase in adjusted EBITDA was primarily due to higher contribution margins and lower manufacturing and selling, general and administrative costs as a result of our restructuring efforts.
The increase in revenues in our Textile Effects division for the three months ended March 31, 2014 compared to the same period in 2013 was due to higher average selling prices and higher sales volumes. Average selling prices increased primarily in response to higher raw material costs. Sales volumes increased primarily due to increased market share and stronger consumer end market sentiment. The increase in adjusted EBITDA was primarily due to higher contribution margins as a result of our restructuring efforts.
The decrease in revenues in our Pigments division for the three months ended March 31, 2014 compared to the same period in 2013 was primarily due to lower average selling prices as sales volumes were essentially unchanged. Average selling prices decreased primarily as a result of high industry inventory levels partially offset by the strength of the euro against the U.S. dollar. The increase in adjusted EBITDA was primarily due to lower manufacturing costs as a result of higher production volumes.
Corporate, LIFO and Other
Adjusted EBITDA from Corporate, LIFO and Other improved by $1 million to a loss of $44 million for the three months ended March 31, 2014 compared to a loss of $45 million for the same period in 2013.
Liquidity, Capital Resources and Outstanding Debt
As of March 31, 2014 we had $902 million of combi
ned cash and unused borrowing capacity compared to $1,048 million at December 31, 2013.
Total capital expenditures for the quarter ended March 31, 2014 were $107 million. We expect to spend approximately $500 million on capital expenditures in 2014, net of reimbursements and excluding any amounts associated with the planned acquisition of the Performance Additives and Titanium Dioxide businesses of Rockwood Holdings, Inc.
During the three months ended March 31, 2014 we recorded income tax expense of $36 million and paid $46 million in cash for income taxes. Our adjusted effective income tax rates for the three months ended March 31, 2014 was approximately 32%.
We expect our 2014 adjusted effective tax rate to be approximately 35% excluding the impact of the acquisition of the Performance Additives and Titanium Dioxide businesses of Rockwood Holdings, Inc. We expect our long term adjusted effective tax rate to be approximately 30%.
Earnings Conference Call Information
We will hold a conference call to discuss our first quarter 2014 financial results on Tuesday, April 29, 2014 at 10:00 a.m. ET.
Call-in numbers for the conference call:
U.S. participants (888) 713 - 4214
International participants (617) 213 - 4866
In order to facilitate the registration process, you may use the following link to pre-register for the conference call. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator. You may pre-register at any time, including up to and after the call start time. To pre-register, please go to:
conference call will be available via webcast and can be accessed from the investor relations portion of the company’s website at huntsman.com.
The conference call will be available for replay beginning April 29, 2014 and ending May 6, 2014.
Call-in numbers for the replay:
U.S. participants (888) 286 - 8010
International participants (617) 801 - 6888
Replay code 10497006
Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated chemicals with 2013 revenues of over $11 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 80 manufacturing and R&D facilities in 30 countries and employ approximately 12,000 associates within our 5 distinct business divisions. For more information about Huntsman, please visit the company's website at www.huntsman.com.
Statements in this release that are not historical are forward-looking statements. These statements are based on management's current beliefs and expectations. The forward-looking statements in this release are subject to uncertainty and changes in circumstances and involve risks and uncertainties that may affect the company's operations, markets, products, services, prices and other factors as discussed in the Huntsman companies' filings with the U.S. Securities and Exchange Commission. Significant risks and uncertainties may relate to, but are not limited to, financial, economic, competitive, environmental, political, legal, regulatory and technological factors. The company assumes no obligation to provide revisions to any forward-looking statements
should circumstances change, except as otherwise required by applicable laws.
Click here to read the full news release.