Huntsman(HUN) - 2024 Q4 - Annual Results

Executive Summary & Highlights Huntsman reported Q4 2024 revenues of $1,452 million and a net loss of $141 million, with full-year revenues of $6,036 million and a net loss of $189 million, alongside increased free cash flow Fourth Quarter 2024 Highlights Huntsman reported Q4 2024 revenues of $1,452 million, a net loss of $141 million, and adjusted EBITDA of $71 million, with full-year revenues at $6,036 million and a net loss of $189 million, alongside increased free cash flow Key Financial Metrics | Metric | Q4 2024 (Millions $) | Q4 2023 (Millions $) | YoY Change (Q4) | FY 2024 (Millions $) | FY 2023 (Millions $) | YoY Change (FY) | | :--------------------------------------- | :------------------- | :------------------- | :---------------- | :------------------- | :------------------- | :---------------- | | Revenues | 1,452 | 1,403 | 3.5% | 6,036 | 6,111 | -1.2% | | Net (loss) income attributable to Huntsman Corporation | (141) | (71) | -98.6% | (189) | 101 | -287.1% | | Adjusted net (loss) income | (43) | (36) | -19.4% | (13) | 67 | -119.4% | | Diluted (loss) income per share | (0.82) | (0.41) | -100.0% | (1.10) | 0.57 | -293.0% | | Adjusted diluted (loss) income per share | (0.25) | (0.21) | -19.0% | (0.08) | 0.37 | -121.6% | | Adjusted EBITDA | 71 | 44 | 61.4% | 414 | 472 | -12.3% | | Net cash provided by operating activities from continuing operations | 159 | 166 | -4.2% | 285 | 251 | 13.5% | | Free cash flow from continuing operations | 108 | 83 | 30.1% | 101 | 21 | 381.0% | - Fourth quarter 2024 net loss attributable to Huntsman increased to $141 million compared to $71 million in the prior year period[4] - Fourth quarter 2024 adjusted EBITDA significantly increased to $71 million compared to $44 million in the prior year period[4] - Free cash flow from continuing operations for Q4 2024 was $108 million, up from $83 million in the prior year period[4] CEO Commentary CEO Peter R. Huntsman noted that Q4 2024 results met expectations amidst trough market conditions, with strategic actions planned for cost reduction and balance sheet protection - Q4 2024 performance was within expectations, with trough conditions persisting in core markets[6] - Quarterly volume improved 5% year-on-year, leading to 6% full-year volume growth, but margin improvement is still lacking[6] - Strategic actions include aggressive cost reductions, workforce reductions in Polyurethanes, assessing strategic options for European maleic anhydride business, and closing downstream Polyurethanes facilities[6] - Focus remains on protecting the balance sheet, managing cash, and creating a leaner company for future demand improvement[6] Financial Performance Overview Huntsman reported a consolidated operating loss of $63 million for Q4 2024 and a full-year net loss of $189 million, with varied segment performance Consolidated Results of Operations Huntsman reported a consolidated operating loss of $63 million for Q4 2024, compared to a $54 million loss in Q4 2023, and a full-year net loss of $189 million Consolidated Financial Results | Metric (Millions $) | Q4 2024 | Q4 2023 | YoY Change (Q4) | FY 2024 | FY 2023 | YoY Change (FY) | | :--------------------------------------- | :------ | :------ | :-------------- | :------ | :------ | :-------------- | | Revenues | 1,452 | 1,403 | 3.5% | 6,036 | 6,111 | -1.2% | | Cost of goods sold | 1,264 | 1,251 | 1.0% | 5,170 | 5,205 | -0.7% | | Gross profit | 188 | 152 | 23.7% | 866 | 906 | -4.4% | | Operating expenses, net | 193 | 195 | -1.0% | 793 | 804 | -1.4% | | Restructuring, impairment and plant closing costs | 19 | 11 | 72.7% | 39 | 18 | 116.7% | | Operating (loss) income | (63) | (54) | -16.7% | (25) | 84 | -129.8% | | Net (loss) income attributable to Huntsman Corporation | (141) | (71) | -98.6% | (189) | 101 | -287.1% | | Adjusted EBITDA | 71 | 44 | 61.4% | 414 | 472 | -12.3% | Segment Performance Total reportable segments' revenues increased by 4% in Q4 2024 but decreased by 1% for the full year, with Adjusted EBITDA showing similar trends and varied performance across segments Segment Revenues and Adjusted EBITDA | Segment | Q4 2024 Revenue (Millions $) | Q4 2023 Revenue (Millions $) | Q4 YoY Change | FY 2024 Revenue (Millions $) | FY 2023 Revenue (Millions $) | FY YoY Change | | :------------------- | :--------------------------- | :--------------------------- | :------------ | :--------------------------- | :--------------------------- | :------------ | | Polyurethanes | 970 | 895 | 8% | 3,900 | 3,865 | 1% | | Performance Products | 239 | 260 | (8)% | 1,109 | 1,178 | (6)% | | Advanced Materials | 254 | 251 | 1% | 1,055 | 1,092 | (3)% | | Total Reportable Segments' Revenues | 1,463 | 1,406 | 4% | 6,064 | 6,135 | (1)% | | Segment | Q4 2024 Adjusted EBITDA (Millions $) | Q4 2023 Adjusted EBITDA (Millions $) | Q4 YoY Change | FY 2024 Adjusted EBITDA (Millions $) | FY 2023 Adjusted EBITDA (Millions $) | FY YoY Change | | :------------------- | :----------------------------------- | :----------------------------------- | :------------ | :----------------------------------- | :----------------------------------- | :------------ | | Polyurethanes | 50 | 13 | 285% | 245 | 248 | (1)% | | Performance Products | 23 | 28 | (18)% | 153 | 201 | (24)% | | Advanced Materials | 37 | 38 | (3)% | 179 | 186 | (4)% | | Total Reportable Segments' Adjusted EBITDA | 110 | 79 | 39% | 577 | 635 | (9)% | Polyurethanes Polyurethanes segment revenues increased 8% in Q4 2024 due to higher sales volumes, driving a 285% increase in Adjusted EBITDA - Q4 2024 revenues increased 8% due to higher sales volumes (9% increase) from improved demand and share gains in insulation and composite wood panels[7][23] - Q4 2024 Adjusted EBITDA increased 285% to $50 million, driven by higher sales volumes, improved margins, and lower fixed/variable costs, partially offset by lower equity earnings from China JV[7][21] Performance Products Performance Products segment revenues decreased 8% in Q4 2024 due to lower sales volumes, resulting in an 18% decrease in Adjusted EBITDA - Q4 2024 revenues decreased 8% due to lower sales volumes (11% decrease), primarily from extended Maleic Anhydride outages and slow construction/industrial activity[8][23] - Q4 2024 Adjusted EBITDA decreased 18% to $23 million, mainly due to lower sales volumes, partially offset by improved mix and lower fixed costs[8][21] Advanced Materials Advanced Materials segment revenues increased 1% in Q4 2024 due to higher sales volumes, with Adjusted EBITDA remaining relatively flat at $37 million - Q4 2024 revenues increased 1% due to higher sales volumes (6% increase) in infrastructure and general industry, offset by lower average selling prices (5% decrease) from unfavorable sales mix[9][23] - Q4 2024 Adjusted EBITDA was relatively flat at $37 million, with higher sales volumes offset by increased fixed costs[9][21] Corporate, LIFO and other The Adjusted EBITDA loss from Corporate, LIFO and other increased to $39 million in Q4 2024 due to LIFO valuation losses and higher legal expenses - Q4 2024 Adjusted EBITDA loss from Corporate, LIFO and other increased to $39 million (from $35 million in Q4 2023) due to LIFO valuation losses and higher legal expenses[10][21] Factors Impacting Sales Revenue Sales revenue changes were influenced by a combination of average selling price (local currency & mix) and sales volume, with Polyurethanes showing growth and Performance Products declining in Q4 2024 Sales Revenue Impact by Segment | Segment | Q4 2024 vs. 2023 Average Selling Price (Local Currency & Mix) | Q4 2024 vs. 2023 Exchange Rate | Q4 2024 vs. 2023 Sales Volume | Q4 2024 vs. 2023 Total Impact | | :------------------- | :---------------------------------------------------- | :----------------------------- | :---------------------------- | :---------------------------- | | Polyurethanes | (1)% | 0% | 9% | 8% | | Performance Products | 3% | 0% | (11)% | (8)% | | Advanced Materials | (5)% | 0% | 6% | 1% | | Segment | FY 2024 vs. 2023 Average Selling Price (Local Currency & Mix) | FY 2024 vs. 2023 Exchange Rate | FY 2024 vs. 2023 Sales Volume | FY 2024 vs. 2023 Total Impact | | :------------------- | :---------------------------------------------------- | :----------------------------- | :---------------------------- | :---------------------------- | | Polyurethanes | (7)% | 0% | 8% | 1% | | Performance Products | (7)% | 0% | 1% | (6)% | | Advanced Materials | (8)% | 0% | 5% | (3)% | Financial Position & Liquidity Huntsman generated $108 million in free cash flow in Q4 2024, maintaining approximately $1.7 billion in combined cash and unused borrowing capacity, while managing debt and capital expenditures Liquidity and Capital Resources Huntsman generated $108 million in free cash flow from continuing operations in Q4 2024 and held approximately $1.7 billion in combined cash and unused borrowing capacity as of December 31, 2024 - Free cash flow from continuing operations was $108 million in Q4 2024, up from $83 million in Q4 2023[12][32] - As of December 31, 2024, the company had approximately $1.7 billion in combined cash and unused borrowing capacity[12] - Capital expenditures from continuing operations were $51 million in Q4 2024 (down from $83 million in Q4 2023)[13][32] - Expected capital expenditures for 2025 are between $180 million to $190 million[13] Balance Sheet As of December 31, 2024, total assets decreased to $7,114 million, with cash declining to $340 million and stockholders' equity decreasing to $2,959 million Consolidated Balance Sheet Highlights | Metric (Millions $) | December 31, 2024 | December 31, 2023 | Change | | :-------------------------------- | :------------------ | :------------------ | :----- | | Cash | 340 | 540 | (200) | | Accounts and notes receivable, net | 725 | 753 | (28) | | Inventories | 917 | 867 | 50 | | Property, plant and equipment, net | 2,493 | 2,376 | 117 | | Total assets | 7,114 | 7,248 | (134) | | Accounts payable | 770 | 719 | 51 | | Current portion of debt | 325 | 12 | 313 | | Long-term debt | 1,510 | 1,676 | (166) | | Huntsman Corporation stockholders' equity | 2,959 | 3,251 | (292) | | Total liabilities and equity | 7,114 | 7,248 | (134) | Outstanding Debt Total debt excluding affiliates increased to $1,835 million as of December 31, 2024, primarily due to an increase in senior notes, leading to higher net debt Outstanding Debt Summary | Debt Category (Millions $) | December 31, 2024 | December 31, 2023 | Change | | :------------------------- | :------------------ | :------------------ | :----- | | Senior notes | 1,799 | 1,471 | 328 | | Accounts receivable programs | - | 169 | (169) | | Variable interest entities | 16 | 26 | (10) | | Other debt | 20 | 22 | (2) | | Total debt - excluding affiliates | 1,835 | 1,688 | 147 | | Total cash | 340 | 540 | (200) | | Net debt - excluding affiliates | 1,495 | 1,148 | 347 | Cash Flows For FY 2024, net cash from operating activities increased to $285 million, while total cash at period-end decreased to $340 million, and free cash flow significantly improved to $101 million Consolidated Cash Flow Summary | Cash Flow Item (Millions $) | Q4 2024 | Q4 2023 | YoY Change (Q4) | FY 2024 | FY 2023 | YoY Change (FY) | | :---------------------------------------------------- | :------ | :------ | :-------------- | :------ | :------ | :-------------- | | Net cash provided by operating activities from continuing operations | 159 | 166 | -4.2% | 285 | 251 | 13.5% | | Net cash (used in) provided by investing activities from continuing operations | (39) | (86) | 54.7% | (126) | 309 | -140.8% | | Net cash used in financing activities | (95) | (39) | -143.6% | (326) | (620) | 47.4% | | Total cash at end of period | 340 | 540 | -37.0% | 340 | 540 | -37.0% | | Free cash flow from continuing operations | 108 | 83 | 30.1% | 101 | 21 | 381.0% | Income Taxes Huntsman reported a Q4 2024 effective tax rate loss of 36% and anticipates an adjusted effective tax rate of approximately 35% for 2025 Income Tax Rates In Q4 2024, Huntsman's effective tax rate loss was 36%, and the company expects its 2025 adjusted effective tax rate to be approximately 35% - Q4 2024 effective tax rate loss was 36%; adjusted effective tax rate was not meaningful[14] - Expected 2025 adjusted effective tax rate is approximately 35%[14] Non-GAAP Reconciliations & Footnotes This section provides detailed reconciliations of U.S. GAAP to non-GAAP financial measures and defines key non-GAAP metrics used to evaluate operational performance and liquidity Reconciliation of U.S. GAAP to Non-GAAP Measures The report provides detailed reconciliations of U.S. GAAP net loss to non-GAAP measures like Adjusted EBITDA, Adjusted Net Loss, and Adjusted Diluted Loss Per Share for Q4 and FY 2024 and 2023 Reconciliation of GAAP to Non-GAAP Measures | Reconciliation Item (Millions $) | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :---------------------------------------------------- | :------ | :------ | :------ | :------ | | Net (loss) income attributable to Huntsman Corporation | (141) | (71) | (189) | 101 | | Interest expense, net from continuing operations | 19 | 17 | 79 | 65 | | Income tax expense (benefit) from continuing operations | 29 | (2) | 61 | 64 | | Depreciation and amortization from continuing operations | 75 | 70 | 289 | 278 | | Restructuring, impairment and plant closing and transition costs | 21 | 12 | 46 | 25 | | Loss on dissolution of subsidiaries | 39 | - | 39 | - | | Adjusted EBITDA | 71 | 44 | 414 | 472 | | Adjusted net (loss) income | (43) | (36) | (13) | 67 | | Adjusted diluted (loss) income per share | (0.25) | (0.21) | (0.08) | 0.37 | Footnote Explanations This section defines non-GAAP financial measures such as Adjusted EBITDA, Free Cash Flow, and Net Debt, clarifying their computation and use in evaluating performance and liquidity - Adjusted EBITDA, adjusted net income (loss), and adjusted diluted income (loss) per share are non-GAAP measures used to evaluate operating performance, with reconciliations provided in Table 4[34][35][36] - Free cash flow is defined as net cash provided by operating activities less capital expenditures, used to evaluate liquidity and strategic investments[39] - Net debt is calculated as total debt minus total cash, used to monitor overall financial position[40] - The Textile Effects business divestiture in Q1 2023 is reported as discontinued operations[39] Corporate Information This section details upcoming earnings calls and conferences, provides an overview of Huntsman Corporation, and includes a disclaimer regarding forward-looking statements Earnings Conference Call & Upcoming Conferences Huntsman will host a conference call on February 18, 2025, to discuss Q4 2024 financial results and management will present at two upcoming industry conferences - Q4 2024 earnings conference call scheduled for Tuesday, February 18, 2025, at 10:00 a.m. ET[15] - Management to present at Bank of America Securities 2025 Global Agriculture and Materials Conference (Feb 26, 2025) and Alembic Materials and Industrials Conference (March 6-7, 2025)[17] About Huntsman Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated and specialty chemicals, with approximately $6 billion in 2024 revenues and operations in about 25 countries - Huntsman is a publicly traded global manufacturer and marketer of differentiated and specialty chemicals[43] - 2024 revenues from continuing operations were approximately $6 billion[43] - Operates more than 60 manufacturing, R&D, and operations facilities in approximately 25 countries and employs approximately 6,300 associates[43] Forward-Looking Statements This section serves as a disclaimer for forward-looking statements, highlighting their inherent risks and uncertainties, including high energy costs, inflation, and geopolitical instability - Forward-looking statements are subject to uncertainty and changes in circumstances, involving risks that may affect operations, markets, products, and prices[44] - Significant risks include high energy costs in Europe, inflation and high capital costs, geopolitical instability, volatile global economic conditions, and disruptions in production[44] - The company undertakes no obligation to update or revise forward-looking statements to reflect events or circumstances that arise after the date made[44]