8-K: Huntsman Corporation Reports Fourth Quarter and Full Year 2024 Results

Huntsman Corporation announced its fourth quarter and full year 2024 results, reporting a net loss attributable to Huntsman of $141 million for the quarter and $189 million for the year.

Summary

• Huntsman Corporation reported a net loss attributable to Huntsman of $141 million for the fourth quarter of 2024, compared to a net loss of $71 million in the prior year period.
• The diluted loss per share for the fourth quarter was $0.82, compared to a diluted loss per share of $0.41 in the prior year period.
• Adjusted net loss attributable to Huntsman for the fourth quarter was $43 million, compared to an adjusted net loss of $36 million in the prior year period.
• Adjusted diluted loss per share for the fourth quarter was $0.25, compared to an adjusted diluted loss per share of $0.21 in the prior year period.
• Adjusted EBITDA for the fourth quarter was $71 million, compared to $44 million in the prior year period.
• Net cash provided by operating activities from continuing operations was $159 million for the fourth quarter.
• Free cash flow from continuing operations was $108 million for the fourth quarter, compared to $83 million in the prior year period.
• Revenues for the fourth quarter were $1,452 million, compared to $1,403 million in the prior year period.
• For the full year 2024, the net loss attributable to Huntsman was $189 million, compared to a net income of $101 million in the prior year.
• Full year revenues were $6,036 million, compared to $6,111 million in the prior year.
• The company expects to spend between $180 million to $190 million on capital expenditures during 2025.
• The company expects its 2025 adjusted effective tax rate to be approximately 35%.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the reported net losses and planned workforce reductions, although there are some positives such as increased EBITDA and free cash flow. The company is taking steps to address the challenges, but the overall outlook is cautious.

Positives

• Fourth quarter 2024 adjusted EBITDA increased to $71 million compared to $44 million in the prior year period.
• Free cash flow from continuing operations increased to $108 million in the fourth quarter 2024 compared to $83 million in the prior year period.
• Sales volumes increased primarily due to improved demand and share gains in the insulation and composite wood panels markets in the Polyurethanes segment.
• The company had approximately $1.7 billion of combined cash and unused borrowing capacity as of December 31, 2024.

Negatives

• Huntsman reported a net loss attributable to Huntsman of $141 million for the fourth quarter of 2024, compared to a net loss of $71 million in the prior year period.
• The company is planning workforce reductions in its Polyurethanes segment.
• The company is assessing strategic options for its European maleic anhydride business, including potential facility closures.
• The effective tax rate loss was 36% in the fourth quarter of 2024.

Risks

• The company faces challenges in construction and automotive markets, which represent approximately two-thirds of its portfolio.
• China faces economic challenges, which could impact the automotive sector.
• European industry conditions are compromised by high energy costs, overburdening regulation, and excess capacity.
• The company acknowledges the risk of delays or negative developments affecting its ability to implement cost reductions and manufacturing optimization improvements.

Future Outlook

The company expects modest growth in the automotive sector in China and relatively stable profitability in that region, while European industry conditions are expected to remain compromised. Huntsman will focus on cost reductions, strategic options for its European maleic anhydride business, and protecting its balance sheet.

Management Comments

• Peter R. Huntsman, Chairman, President, and CEO, commented that the fourth quarter was within expectations as trough conditions continued in core markets.
• He noted that despite volume improvement, margin improvement is still needed.
• He stated that the company will remain aggressive in costs, including workforce reductions, and will assess strategic options for the European maleic anhydride business.

Industry Context

The announcement reflects the ongoing challenges in the chemical industry, particularly in Europe, due to high energy costs and regulatory burdens. Huntsman's focus on cost reduction and strategic realignment aligns with industry trends to improve profitability in a challenging economic environment.

Comparison to Industry Standards

• Huntsman's performance can be compared to companies like Dow, BASF, and LyondellBasell, which also operate in the global chemicals market.
• These companies are facing similar challenges related to economic conditions, energy costs, and regulatory pressures.
• Huntsman's adjusted EBITDA of $71 million for Q4 2024 is lower than some of its larger competitors, but the focus on cost reduction and strategic realignment could improve its competitive position in the long term.
• The planned capital expenditures of $180-$190 million for 2025 are in line with industry standards for maintaining and upgrading facilities.

Stakeholder Impact

• Shareholders will be impacted by the reported net losses and the company's strategic decisions.
• Employees may be affected by the planned workforce reductions in the Polyurethanes segment.
• Customers may experience changes in product availability or pricing due to the strategic realignment.
• Suppliers may be impacted by changes in the company's purchasing patterns.

Next Steps

• The company will hold a conference call on February 18, 2025, to discuss the results.
• A member of management is expected to present at the Bank of America Securities 2025 Global Agriculture and Materials Conference on February 26, 2025.
• A member of management is expected to present at the Alembic Materials and Industrials Conference on March 6-7, 2025.
• The company will assess strategic options for its European maleic anhydride business.

Key Dates

Keywords

Huntsman, financial results, EBITDA, net loss, revenue, polyurethanes, performance products, advanced materials, cash flow, capital expenditures