Huntsman Pigments Hit by Lower Volumes, Prices

Huntsman Corp of The Woodlands, TX has reported a fourth quarter EBITDA for its Pigments segment of US$10 million on revenues of US$286 million compared with US$145 million on revenues of US$399 million in last year’s fourth quarter. The decrease in titanium dioxide revenues was attributed to lower sales volumes and lower average selling prices. Sales volumes decreased primarily due to lower global demand and customer destocking. Average selling prices decreased due to lower global demand and the strength of the U.S. dollar against major international currencies. For all of 2012, Huntsman’s Pigments segment generated EBITDA of US$362 million on revenues of US$1.44 billion compared with US$508 million on revenues of US$1.64 billion in 2011. The decrease in revenue reflects a 22% decrease in sales volume partially offset by higher prices in local currencies. Tronox Inc of Stamford, CT has reported fourth quarter adjusted EBITDA of US$71 million on revenue of US$482 million compared with US$139 million on revenue of US$383 million in the fourth quarter of 2011. For all of 2012, the company reported adjusted EBITDA of US$503 million on revenue of US$1.83 billion compared with US$492 million on revenue of US$1.65 billion in 2011. Tom Casey, Tronox’s CEO, said, “The fourth quarter remained challenging but we may have seen the first glimpse of a recovery in the pigment market. Mineral Sands revenue increased 16% sequentially versus the third quarter despite the impact of three scheduled ore shipments that were either delayed or cancelled by pigment customers in the fourth quarter. And for the first time since 2005, fourth quarter sales volume in Pigments were higher, up 2%, than those of the third quarter. Though the sequential difference was modest, we view this increase in what is normally a seasonally lower quarter as a positive indication. We believe the fourth quarter represented the material conclusion of the destocking period by our pigment customers.” Tronox’s Minerals Sands segment generated revenue of US$316 million versus US$52 million in the same quarter of 2011. The mineral sands businesses acquired in the second quarter of 2012 contributed revenue of US$251 million in the fourth quarter. Excluding acquired businesses, segment revenue of US$65 million increased 25% versus the prior year quarter, driven by higher selling prices, partially offset by lower zircon and rutile volumes. For the full year, the segment had revenue of US$760 million versus US$168 million in 2011. Tronox’s Pigment segment fourth quarter revenue was US$256 million versus US$325 million in the prior year quarter. The decrease reflected a 15% decline in titanium dioxide selling prices and a 6% decline in sales volume. The segment’s feedstock purchases, whether purchased from third-party vendors or internally, averaged US$1,623/tonne. The company believes that this price was significantly higher than average feedstock cost of other pigment producers. For the full year, the segment had revenue of US$1.25 billion, a 12% decrease from 2011 as an 11% increase in average selling prices was more than offset by a 21% volume decline and unfavorable currency exchange rates.

Volume 27 issue 5

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