“We’ve seen the market change, we’ve seen fewer customers that are demanding the formulations and the products coming out of system houses, and frankly, if customers are not going to pay for the services that are rendered from those, we’ll … be cutting back,” he said. “You’re going to see a preponderance of that taking place in Europe.”
These moves come at a time when The Woodlands, Texas-based company’s quarterly losses have doubled year on year, at $141 million in the fourth quarter of 2024 compared with the $71 million loss made in the same quarter of 2023. Quarterly revenues were up slightly, from $1.4 billion to $1.45 billion. Adjusted EBITDA, however, remained in positive territory at $71 million, up 61 percent from the $44 million reported in the 2023 quarter.
Looking at the full year, revenues were down 1.2 percent, from 2023’s $6.11 billion to $6.04 billion, and falling from 2023’s net income of $101 million to a net loss of $189 million last year. Adjusted EBITDA fell by 12 percent, from 2023’s $472 million to $414 million in 2024.
“The fourth quarter was within our expectations as trough conditions continued in our core markets,” Peter Huntsman said. “Despite quarterly volume improvement year-on-year of 5 percent for the company leading to full year volume growth of 6 percent, we are yet to see that growth translate into needed margin improvement.”
Construction and automotive markets represent about two-thirds of the company’s portfolio, and these remain subdued at the start of 2025, he said, with China facing economic challenges, although its automotive sector is expected to show modest growth and overall profitability there to be relatively stable. In contrast, he described European industry conditions as “highly compromised” from a combination of high energy costs, overburdening regulation and excess capacity.
Revenues were up in the company’s polyurethanes business in the fourth quarter of 2024. This was primarily a result of higher sales volumes, with improved demand and share gains in the insulation and composite wood panels markets. These factors also led to an increase in adjusted EBITDA, along with improved margins and lower costs, although these were partially offset by lower equity earnings from its minority-owned joint venture in China.
Peter Huntsman also said he is seeing a shift around recent price announcements for MDI, after previous drops in demand resulting from the simultaneous rise in interest rates that slowed North American construction, the collapse of the Chinese housing market, and Europe’s industrial decline and overcapacity as projects announced pre-Covid came on stream.
He now believes there are some early signs of recovery in pricing and margin returns. “We are seeing publicly reported polymeric MDI prices in China at a three-year high,” he said. “Huntsman also announced a series of price increases in North America, and we have seen others pushing for similar actions. It’s challenging to say if these actions will be successful, and how soon and to what segments they will stick. However, it’s fair to say that there are more positive than negative movements in the MDI industry. My personal feeling is that MDI was one of the first major chemical chains to drop, and may well be among those that show signs of recovery earlier than other chains.”
