Huntsman Corporation reported third quarter 2023 results with revenues of $1,506 million, net income attributable to Huntsman of $0 million, adjusted net income attributable to Huntsman of $27 million and adjusted EBITDA of $136 million. 

Peter R. Huntsman, Chairman, President, and CEO, commented:"Between 2020 and 2022 we strengthened our balance sheet through a combination of timely strategic divestitures and improved free cash flow generation. These actions placed us in a strong position to weather the current year of depressed demand and economic uncertainty. Last quarter, we stated that we thought 2023 was going to be a more difficult year than 2020. This has clearly been the case. The fourth quarter will likely be the most challenging period in recent memory due to a combination of weak demand, pricing pressure, and aggressive customer inventory management. 

Even against this backdrop, our financial discipline has meant that we have been able to return cash to shareholders throughout 2023 via consistent share repurchases and an improved dividend. In addition, we continue to invest in strategic projects which will ensure the Company is in the best possible position when our markets begin to improve. Cost control remains a priority and we will deliver our current savings program of $280 million by year end. Beyond 2023, we will continue to find additional opportunities to improve the cost structure of the Company. 

Above all, our portfolio provides energy saving solutions that the world needs, and we are highly confident in the long-term outlook for the products we sell. We will remain balanced and disciplined in our approach to invest for growth, return capital to shareholders, and improve our costs. We are looking forward to improved economic conditions in 2024." 

Segment Analysis for 3Q23 Compared to 3Q22

Polyurethanes

The decrease in revenues in our Polyurethanes segment for the three months ended September 30, 2023 compared to the same period of 2022 was primarily due to lower MDI average selling prices and lower sales volumes combined with an adverse sales mix. MDI average selling prices decreased due to less favorable supply and demand dynamics. Sales volumes decreased primarily due to lower demand, primarily in the Americas. Sales mix was adverse with proportionally lower sales of higher priced products. The decrease in segment adjusted EBITDA was primarily due to lower MDI margins and lower sales volumes, partially offset by higher equity earnings from our minority-owned joint venture in China.

Performance Products

The decrease in revenues in our Performance Products segment for the three months ended September 30, 2023 compared to the same period of 2022 was primarily due to lower sales volumes and reduced average selling prices. Sales volumes decreased in all regions primarily due to slowing construction activity and reduced demand in agrochemicals, coatings and adhesives, fuel and lubes and other industrial markets. The decrease in segment adjusted EBITDA was primarily due to decreased sales volumes and lower average selling prices.

Advanced Materials

The decrease in revenues in our Advanced Materials segment for the three months ended September 30, 2023 compared to the same period of 2022 was primarily due to lower sales volumes, while average selling prices remained relatively flat. Sales volumes decreased primarily due to reduced customer demand in our infrastructure and industrial markets and the deselection of lower margin business. The decrease in segment adjusted EBITDA was primarily due to lower sales volumes.

Corporate, LIFO and other

For the three months ended September 30, 2023, adjusted EBITDA from Corporate and other was a loss of $41 million as compared to a loss of $35 million for the same period of 2022 due to an adverse year on year impact from foreign exchange.

Liquidity and Capital Resources

During the three months ended September 30, 2023, our free cash flow from continuing operations was $117 million as compared to $228 million in the same period of 2022. As of September 30, 2023, we had approximately $1.8 billion of combined cash and unused borrowing capacity.

During the three months ended September 30, 2023, we spent $50 million on capital expenditures from continuing operations as compared to $57 million in the same period of 2022.  During 2023, we expect to spend approximately $230 million on capital expenditures.

Income Taxes

In the third quarter of 2023, our effective tax rate was 64% and our adjusted effective tax rate was 37%. We expect our 2023 adjusted effective tax rate to be approximately 33% to 35%. We expect our long-term adjusted effective tax rate to be approximately 22% to 24%.

Source: Huntsman