Huntsman identifies improving business conditions in first quarter 2017
Notably, Huntsman is seeing continued strength in its MDI urethanes business, specifically in the Asia Pacific region. Within its Pigments and Additives division, TiO2 price increases announced for implementation January 1, 2017, have taken effect. In addition the company has been able to mitigate a portion of the impact from the outage at Pori, Finland facility through sales of undamaged inventory such that it now expects the first quarter EBITDA impact to be less than previously anticipated.
Pori site not 100% operational before year end 2018
As previously announced, on January 30, 2017, Huntsman experienced a fire at its titanium dioxide facility in Pori, Finland. Importantly there were no injuries. The site has 130,000 metric tons of capacity, representing approximately 15% of its titanium dioxide capacity and approximately 2% of global demand. The company is currently able to produce a small amount of product at the facility, and expect to be fully operational around year end 2018. it expects 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
Securing prompt reimbursement for losses
Huntsman is also working closely with its insurer to secure prompt reimbursement for its losses – both on the property and on the EBITDA side (for business interruption). It has already been advanced EUR50 million. It is responsible for retained deductibles of EUR14 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.”
Separation of Venator
As Huntsman prepares for the separation of Venator it 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.