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Huntsman sees strong underlying demand for their products

09 Aug '10
6 min read

Recent Highlights

• On April 26, 2010, we prepaid $164 million of bank term debt.
• On June 22, 2010, we prepaid $110 million of bank term debt. The pre-payment was equivalent to the amount we received from our reinsurance carriers in settlement of our unpaid claims arising out of the April 29, 2006 fire at our Port Arthur, Texas, olefins facility.

Three Months Ended June 30, 2010 Compared to Three Months Ended June 30, 2009

Revenues for the three months ended June 30, 2010 increased to $2,343 million from $1,846 million for the same period in 2009. Revenues increased due to higher sales volumes and higher selling prices in all divisions. For the three months ended June 30, 2010, Adjusted EBITDA was $257 million compared to $93 million for the same period in 2009.

Performance Products
The increase in revenues in our Performance Products division for the three months ended June 30, 2010 compared to the same period in 2009 was due to higher average selling prices and higher sales volumes. Average selling prices increased across almost all product groups primarily in response to higher raw materials costs. Sales volumes increased primarily due to higher demand across all product groups and additional sales of ethylene glycol which had previously been produced under tolling arrangements.

The increase in Adjusted EBITDA was primarily due to higher sales volumes and higher contribution margins. In addition, equity income from investment in unconsolidated affiliates for the three months ended June 30, 2010 increased to $16 million compared to $1 million in the 2009 period. During the second quarter of 2010, we recorded a non-recurring $15 million credit to appropriately reflect our investment in the Sasol-Huntsman GmbH and Co. KG Maleic Anhydride joint venture.

Advanced Materials
The increase in revenues in our Advanced Materials division for the three months ended June 30, 2010 compared to the same period in 2009 was due to higher sales volumes and higher average selling prices. Sales volumes increased in all regions of the world and across almost all product groups primarily due to the worldwide economic recovery.

Average selling prices increased in our base resins business primarily in response to higher raw material costs and reduced product availability in the epoxy resin market, partially offset by lower average selling prices in our specialty components and formulations markets primarily as a result of changes in our product mix and competitive market pressure. The increase in Adjusted EBITDA was primarily due to higher sales volumes, higher contribution margins and lower fixed costs.

Pigments
The increase in revenues in our Pigments division for the three months ended June 30, 2010 compared to the same period in 2009 was due to higher average selling prices and higher sales volumes. Average selling prices increased primarily as a result of price increase initiatives in all regions of the world partially offset by the strength of the U.S. dollar against major European currencies.

Sales volumes increased primarily due to demand recovery in Europe and North America. The increase in Adjusted EBITDA in our Pigments division was primarily due to higher contribution margins, higher sales volumes and the benefits of recent restructuring efforts.

Huntsman Corporation

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