- Second quarter 2019 net income of $118 million compared to $623 million in the prior year period; second quarter 2019 diluted earnings per share of $0.47 compared to $1.71 in the prior year period.
- Second quarter 2019 adjusted net income of $146 million compared to $246 million in the prior year period; second quarter 2019 adjusted diluted earnings per share of $0.63 compared to $1.01 in the prior year period.
- Second quarter 2019 adjusted EBITDA of $318 million compared to $415 million in the prior year period.
- Second quarter 2019 net cash provided by operating activities was $304 million. Free cash flow was $240 millionfor the quarter.
- Balance sheet remains strong with a net leverage of 1.7x.
- Second quarter 2019 share repurchases of approximately 4 million shares for approximately $81 million.
- On July 26, 2019 announced a definitive agreement with Sasol to acquire the 50% interest that Huntsman does not own in the Sasol-Huntsman maleic anhydride joint venture located in Moers, Germany for $92.5 million, adjusted for net debt and other agreed upon adjustments.
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Three months ended |
Six months ended |
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|
June 30, |
June 30, |
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|
In millions, except per share amounts |
2019 |
2018 |
2019 |
2018 |
||||||
|
Revenues |
$ 2,194 |
$ 2,404 |
$ 4,228 |
$ 4,699 |
||||||
|
Net income |
$ 118 |
$ 623 |
$ 249 |
$ 973 |
||||||
|
Adjusted net income(1) |
$ 146 |
$ 246 |
$ 254 |
$ 483 |
||||||
|
Diluted income per share |
$ 0.47 |
$ 1.71 |
$ 0.98 |
$ 2.82 |
||||||
|
Adjusted diluted income per share(1) |
$ 0.63 |
$ 1.01 |
$ 1.09 |
$ 1.98 |
||||||
|
Adjusted EBITDA(1) |
$ 318 |
$ 415 |
$ 575 |
$ 820 |
||||||
|
Net cash provided by operating activities from continuing operations |
$ 304 |
$ 228 |
$ 273 |
$ 339 |
||||||
|
Free cash flow(2) |
$ 240 |
$ 174 |
$ 139 |
$ 230 |
||||||
|
See end of press release for footnote explanations |
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Huntsman Corporation (NYSE: HUN) today reported second quarter 2019 results with revenues of $2,194 million, net income of $118 million, adjusted net income of $146 million and adjusted EBITDA of $318 million.
Peter R. Huntsman, Chairman, President and CEO, commented:
“We are pleased with the relative resilience of the margins in our core downstream portfolio. In spite of challenging economic conditions, we generated $240 million of free cash flow in the quarter and reaffirm our stated objective of generating 40% free cash flow to adjusted EBITDA. Regardless of second half economic uncertainties, we will continue to control our costs, protect our margins and focus on maintaining a strong balance sheet and cash generation. We will continue to follow a balanced approach to capital allocation between maintaining a competitive dividend, ongoing share repurchases and strategic organic and inorganic growth in our downstream portfolio.”
Segment Analysis for 2Q19 Compared to 2Q18
Polyurethanes
The decrease in revenues in our Polyurethanes segment for the three months ended June 30, 2019 compared to the same period of 2018 was due to lower average MDI and MTBE selling prices, partially offset by higher MDI and MTBE sales volumes. MDI average selling prices decreased primarily due to a decline in component MDI selling prices in Chinaand Europe. MTBE average selling prices decreased in China primarily as a result of lower pricing for high octane gasoline. MDI sales volumes increased primarily due to the start-up of our new Chinese MDI facility in 2018 and the acquisition of Demilec in the second quarter of 2018. The decrease in adjusted EBITDA was primarily due to lower MDI margins driven by lower MDI pricing and lower PO/MTBE margins in China, partially offset by higher sales volumes.
Performance Products
The decrease in revenues in our Performance Products segment for the three months ended June 30, 2019 compared to the same period of 2018 was due to lower average selling prices, partially offset by slightly higher sales volumes. Average selling prices decreased in our derivatives business, primarily due to lower raw material costs, and in our upstream intermediates business, primarily due to lower feedstock costs and weakened market conditions. The increase in sales volumes was primarily due to the impact of the planned maintenance outage at our Port Neches, Texas facility in the second quarter of 2018. The decrease in segment adjusted EBITDA was primarily due to lower average selling prices and lower margins, primarily in our upstream intermediates businesses and in certain amines.
Advanced Materials
The decrease in revenues in our Advanced Materials segment for the three months ended June 30, 2019, compared to the same period in 2018 was due to lower sales volumes and lower average selling prices. Sales volumes decreased primarily due to lower sales volumes in our power and automotive related markets, partially offset by favorable product mix effect from sales volumes in our aerospace components market. Average selling prices decreased primarily due to the impact of a stronger U.S. dollar against major international currencies, partially offset by higher local currency selling prices. Segment adjusted EBITDA decreased due to higher fixed costs and the impact of stronger US dollar against major international currencies.
Textile Effects
The decrease in revenues in our Textile Effects segment for the three months ended June 30, 2019 compared to the same period of 2018 was due to lower sales volumes, partially offset by higher average selling prices. Sales volumes decreased primarily due to lower demand resulting from market uncertainties surrounding U.S. and China trade. Average selling prices increased in response to higher raw material costs, partially offset by the impact of a stronger U.S. dollar against major international currencies. The decrease in segment adjusted EBITDA was primarily due to lower sales volumes and higher raw materials costs, partially offset by higher average selling prices.
Corporate, LIFO and other
For the three months ended June 30, 2019, adjusted EBITDA from Corporate and other for Huntsman Corporation increased by $2 million to a loss of $37 million from a loss of $39 million for the same period of 2018.
Liquidity, Capital Resources and Outstanding Debt
During the three months ended June 30, 2019, our free cash flow was $240 million compared to $174 million in the prior year period. We reconfirm our full year 2019 targeted free cash flow conversion of approximately 40%. As of June 30, 2019, we had $1,538 million of combined cash and unused borrowing capacity.
During the three months ended June 30, 2019, we spent $66 million on capital expenditures compared to $54 million in the same period of 2018. In 2019, we expect to spend between approximately $350 million to $360 million on capital expenditures.
During the three months ended June 30, 2019, we spent approximately $81 million to repurchase approximately 4.0 million shares. As of the end of the second quarter 2019, we have approximately $608 million remaining on our existing $1 billion multiyear share repurchase program.
Income Taxes
During the three months ended June 30, 2019, we recorded income tax expense of $50 million compared to $4 millionduring the same period in 2018. In the second quarter 2019, our adjusted effective tax rate was 25%. We expect our forward adjusted effective tax rate will be approximately 22% – 24%.
