Berwyn, Pennsylvania — While COVID-19 took a heavy toll on Trinseo SA’s second quarter sales and earnings, the company believes the worst business impacts of the pandemic are now behind it.
The U.S. manufacturer of plastics, latex binders and synthetic rubber reported net loss of $128 million for the second quarter, as sales fell 40 percent to $570 million and adjusted earnings (adjusted EBITDA) went into negative territory at -$8 million.
Sales within Trinseo’s synthetic rubber (SR) business unit fell 68 percent year-on-year to $36 million for the quarter, the Berwyin-based materials supplier announced July 29.
Lower sales volumes, caused by weaker demand in the global tire market due to COVID-19, contributed to a 56 percent decline in net SR sales, Trinseo said.
Additionally, raw material cost passthrough also negatively impacted sales during the period.
Adjusted earnings stood at negative $28 million, down from a profit of $13 million recorded in the second quarter of 2019.
Trinseo said the decline, which included a $15 million “unfavorable net timing impact,” was due mainly to lower sales volume and net timing.
The company saw significant volume declines due to COVID-19, “with trough conditions in April, most markedly in applications supporting automotive, tires, graphical paper and textiles,” said president and CEO Frank Bozich.
However, he added, Trinseo saw “significant end-market improvement” as the quarter progressed, particularly in June, with momentum still continuing.
“This gives us confidence that the worst demand impacts from COVID-19 are behind us.”
However, as the rate of recovery remained unknown, the company has taken actions to reduce operating costs and maximize liquidity, noted Bozich,
Trinseo, he added, will continue to invest in the higher growth applications, including solution styrene butadiene rubber (SSBR), to be better positioned for growth and cash generation.