Huntsman Identifies Improving Business Conditions in First Quarter 2017; Provides Restart Time-line for Pori, Finland Pigment Facility
THE WOODLANDS, Texas, March 27, 2017 /PRNewswire/ -- Huntsman Corporation (NYSE: HUN) today announced that positive trends during the first quarter 2017 are strengthening its business. Based on current market conditions, we expect first quarter 2017 adjusted EBITDA to exceed the $274 million of adjusted EBITDA during the same quarter in 2016. Notably, we are seeing continued strength in our MDI urethanes business, specifically in the Asia Pacific region. Within our Pigments and Additives division, TiO2 price increases announced for implementation January 1st 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 130,000 metric tons of capacity, representing approximately 15% of our titanium dioxide capacity and approximately 2% of global demand. We are currently able to produce a small amount of product at the facility, and expect to be fully operational around year end 2018. We expect 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
We are also working closely with our 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 €50 million. We are responsible for retained deductibles of $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. A new presentation is expected to be posted to the investor relations portion of our website at ir.huntsman.com later this week.
Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated chemicals with 2016 revenues of approximately $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 15,000 associates within our 5 distinct business divisions including the Pigments and Additives division that we intend to spin-off as Venator Materials Corporation. 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, volatile global economic conditions, cyclical and volatile product markets, disruptions in production at manufacturing facilities, reorganization or restructuring of Huntsman's operations, including any delay of, or other negative developments affecting, the spin-off of Venator Materials Corporation, the ability to implement cost reductions and manufacturing optimization improvements in Huntsman businesses and realize anticipated cost savings, and other 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.
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SOURCE Huntsman Corporation
Released March 27, 2017