Materials company Celanese Corp. has closed the door on a 2024 financial year that saw the firm post a loss of $1.5 billion.
Dallas-based Celanese reported full-year results for 2024 on Feb. 18. The $1.5 billion loss came after the firm registered a profit of almost $2 billion in 2023. Sales for Celanese in 2024 were down 6 percent to just under $10.3 billion.
Celanese, the world's largest maker of acetal resins, continues to be impacted by weak demand in its core end markets, as well as by challenges related to its $11 billion acquisition of most of DuPont's Mobility & Materials unit in late 2022.
That deal greatly increased Celanese's market share in engineering resins. It included the Zytel and Rynite nylon brands as well as other materials and brought to Celanese 29 global manufacturing sites that employ around 5,000 in manufacturing, technical and commercial roles.
Poor financial results in the first nine months of 2024 led to CEO Lori Ryerkerk announcing her resignation from Celanese in mid-December. She was replaced Jan. 1 by Scott Richardson, who had been the firm's chief operating officer.
In a Feb. 18 news release, Richardson said Celanese's fourth quarter results "developed largely as we expected, despite further demand deterioration that gave no sign of easing." He added that "with little indication of near-term recovery, it is our job to drive productivity and earnings growth at Celanese, even if fundamental demand remains flat or declines further."
"We continue to take actions to reduce costs and accelerate growth, and we expect to take additional actions to deliver on our priorities based on evolving business conditions," he said.
Celanese already had idled some of its production units in the fourth quarter of 2024. Those moves included units making acetic acid, vinyl acetate monomer (VAM) and similar products in Singapore and a VAM plant in Frankfurt, Germany. Acetic acid is used to make acetal resins and also is a primary ingredient in vinegar production. VAM can be used to make polyvinyl acetate (PVA) and other specialty resins.
Full-year sales at Celanese's Engineered materials unit, including the former DuPont businesses, were down 9 percent to just over $5.6 billion. The unit posted an operating loss of almost $1.2 billion after showing operating profit of almost $1.1 billion in 2023.
Officials said in the release that the EM unit "faced a demand environment that was anemic throughout the year, and [demand] significantly deteriorated in the second half due to the rapid slowdown of commercial activity in both automotive and industrial segments, particularly in the Western Hemisphere." The European auto sector was especially affected, they said, with industry builds declining by 7 percent in the second half of 2024 and 3 percent for the full year.
"Intensifying competitive dynamics, especially in standard grade applications, offset significant year-over year improvements made to the [EM] cost position, enabled by lower raw material costs and extensive manufacturing fixed cost reduction," officials said.
They added the EM unit "took actions to temper the impacts of the tepid demand environment by focusing on cost reductions, evidenced by the lower fixed cost base through manufacturing footprint reductions at such high cost locations as Uentrop, Germany, and Mechelen, Belgium."
The EM unit also continued driving growth programs through Celanese's project pipeline model, especially in high growth areas like electric vehicles, where officials said the value of projects won increased by 30 percent compared to 2023.
Looking to 2025, officials said Celanese "expects sequential demand and pricing challenges experienced in the fourth quarter to be largely unchanged in the first quarter, with continued weakness in core end-markets like automotive, construction, paints, coatings and industrial."
They added the firm expects "additional headwinds" in the first quarter from seasonality in its acetate tow and medical implants businesses, as well as a planned outage at its production plant in Bishop, Texas.
Richardson said one-time factors impacting the first quarter, along with some modest improvement in volumes, "give us visibility to meaningful sequential improvement in the second quarter, and we anticipate second quarter earnings per share to be approximately $1 per share higher than the first quarter."
Richardson has been with Celanese since 2005. In addition to COO, he's served in several management roles, including CFO and leadership positions with the firm's EM and Acetyl Chain units.
"Over my twenty years with Celanese, we have been through periods similar to what we are experiencing now," he added. "We will again respond by delivering productivity every day … and driving growth through our pipeline model to reestablish Celanese as a top quartile company for total shareholder return."
The Feb. 18 earnings release sent Celanese's per-share stock price down more than 20 percent to less than $55 in early trading. The price had been above $120 as recently as early November.