In This Article:
-
Cost Reduction Program: Initiating a further $50 million cost reduction in the global polyurethanes business by year-end.
-
Total Cost Reductions: $280 million in costs removed from the company over the past few years.
-
Impact of Boeing Strike: Estimated cost of a few million dollars in the fourth quarter.
Release Date: November 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Huntsman Corp (NYSE:HUN) is seeing improvement in North American housing and construction, which is expected to positively impact earnings.
-
Interest rates are decreasing, which could support economic growth and demand for Huntsman Corp (NYSE:HUN)'s products.
-
The company is initiating a $50 million cost reduction program in its global polyurethanes business, adding to the $280 million in costs already reduced.
-
Huntsman Corp (NYSE:HUN) is capitalizing on growing opportunities in the EV battery market and tightening insulation standards.
-
The company expects gradual improvement in Asian and Middle Eastern markets in 2025, driven by stimulus announcements and lower inventories.
Negative Points
-
Huntsman Corp (NYSE:HUN) is facing challenges with MDI price increases not gaining traction with customers.
-
There is a record amount of global chemical assets on the market, particularly in Europe, which could lead to facility closures due to regulatory and high cost structures.
-
The company is experiencing low demand growth, which is impacting capacity utilization rates and margin expansion.
-
Huntsman Corp (NYSE:HUN) is dealing with the financial impact of the recently settled Boeing strike, estimated to cost a few million dollars in the fourth quarter.
-
The European market is showing relatively low growth, with regulatory and energy policies hindering manufacturing prospects.
Q & A Highlights
Q: Do you expect MDI assets to be closed in Europe in this iteration of restructurings and reviews? A: I don't have specific insights into our competitors' plans, but given the cost structures in Europe, I would be surprised if all smaller, non-integrated facilities remain operational in the coming years.
Q: Can you detail the functions and regions where the $50 million cost reduction in polyurethanes will occur? A: Most of the cost reductions will be centered in Europe, particularly around our automotive and construction sectors. We will provide more details during our fourth-quarter call.
Q: Are there any more dividends expected from the SLIC China JV liquidation? A: We expect about RMB300 million left to liquidate from the JV in 2025, but it will not be recorded as a dividend for accounting purposes, so it won't impact free cash flow.