Celanese(US:CE)2025-11-07 21:41Financial Performance - Net sales decreased by $229 million, or 9%, for the three months ended September 30, 2025, compared to the same period in 2024[161]. - Operating profit decreased by $1.5 billion, or 620%, for the three months ended September 30, 2025, compared to the same period in 2024[163]. - Net sales decreased by $570 million, or 7%, for the nine months ended September 30, 2025, compared to the same period in 2024[167]. - Operating profit decreased by $1.6 billion, or 226%, for the nine months ended September 30, 2025, compared to the same period in 2024[167]. - For the nine months ended September 30, 2025, total net sales amounted to $1.728 billion, with a gross profit of $31 million and a net loss of $830 million[227]. Segment Performance - Engineered Materials segment net sales decreased by 7% for the three months ended September 30, 2025, driven by lower volume and pricing[162]. - Acetyl Chain segment net sales decreased by 11% for the three months ended September 30, 2025, primarily due to lower pricing and volume[162]. - Net sales in the Engineered Materials segment decreased by $97 million, or 6.5%, for the three months ended September 30, 2025, compared to the same period in 2024[172]. - Operating profit in the Acetyl Chain segment decreased by $103 million, or 43.3%, for the three months ended September 30, 2025, compared to the same period in 2024[180]. - Net sales in the Acetyl Chain segment decreased by $129 million, or 10.8%, for the three months ended September 30, 2025, compared to the same period in 2024[180]. Earnings and Expenses - Equity in net earnings of affiliates decreased by $12 million, or 24%, for the three months ended September 30, 2025, primarily due to lower earnings from the Ibn Sina strategic affiliate[163]. - Equity in net earnings (loss) of affiliates decreased by $67 million, or 43%, for the nine months ended September 30, 2025, compared to the same period in 2024[168]. - SG&A expenses as a percentage of net sales were 9.5% for the three months ended September 30, 2025, compared to 9.4% for the same period in 2024[161]. - An unfavorable impact of $1.4 billion to Other (charges) gains, net, primarily due to an impairment loss on goodwill of $1.1 billion in the Engineered Materials segment[169]. Cash and Debt Management - Cash and cash equivalents increased to $1.44 billion as of September 30, 2025, compared to $962 million as of December 31, 2024[161]. - Total debt increased to $12.854 billion as of September 30, 2025, compared to $12.579 billion as of December 31, 2024[161]. - Net cash provided by operating activities increased by $422 million to $894 million for the nine months ended September 30, 2025, primarily due to favorable trade working capital of $576 million[198]. - Net cash used in financing activities decreased by $935 million to $189 million for the nine months ended September 30, 2025, primarily due to a decrease in common stock dividends paid by $221 million[199]. Future Outlook and Strategic Actions - The company anticipates challenges in achieving planned cost reductions and maintaining production costs amid macroeconomic uncertainties[155]. - The company expects to incur exit and shutdown costs of approximately $70 million to $90 million due to the intended closure of its facility in Lanaken, Belgium, with costs expected to be incurred from 2026 to 2028[190]. - A purchase and sale agreement was entered into with Element Solutions Inc to divest the Micromax portfolio for approximately $500 million in cash, expected to close in Q1 2026[191]. - Total capital expenditures are expected to be approximately $300 million to $350 million in 2025, focusing on maintenance projects and productivity improvements[193]. - The company plans to reduce its quarterly dividend by approximately 95% beginning in Q1 2025 as part of its deleveraging efforts[191]. Market Conditions and Demand - Demand challenges were experienced in key end-markets such as automotive, paints, coatings, and construction due to tepid global macroeconomic conditions[234]. - The company anticipates impacts to demand from western hemisphere seasonality and greater than usual year-end destocking in Q4 2025[234]. - Lower volume in the Engineered Materials and Acetyl Chain segments was primarily driven by weaker global economic conditions and decreased global demand[169]. Tax and Compliance - The effective income tax rate for the nine months ended September 30, 2025, was 6%, compared to 24% for the same period in 2024, primarily due to a non-cash goodwill impairment loss[168]. - Ongoing tax audits are in progress in multiple countries, including Mexico, Canada, the U.S., and Germany, with no expected material impact on income tax expense from these audits[232]. - The company is in compliance with the covenants in its material financing arrangements as of September 30, 2025[220]. - As of September 30, 2025, the company believes an adequate provision for income taxes has been made for all open tax years related to governmental examinations[233]. Risk Management - Market risk has not changed materially from previously disclosed foreign exchange, interest rate, and commodity risks[238]. - The preparation of financial statements requires management to make estimates and assumptions that could differ from actual results[235].