Celanese: Heavy Turnaround Season to Impact Second-Quarter Results

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Executives with Celanese Corporation (NYSE:CE) (Irving, Texas) say plant turnarounds will put a dent in second-quarter profits for the acetyl products and advanced materials company. Celanese reported $257 million in first-quarter 2016 net earnings, up 9% from the same period in 2015. Industrial Info is tracking $152 million in active Celanese-related capital and maintenance projects.

Chief Executive Officer Mark Rohr said during the company's earnings conference call that a heavy turnaround period for vinyl acetate monomer (VAM) and engineered materials plants will be largely responsible for headwinds of around 30 cents to 35 cents per earnings share in the second quarter. Industrial Info is tracking nearly $17 million in Celanese maintenance projects that are scheduled to kick off this year.

Chief Financial Officer Chris Jensen said capital expenditures for the just-ended quarter were $70 million. Planned capital expenditures for all of this year are in the range of $250 million to $350 million.

Net sales for the first quarter were $1.4 billion, down 3% from sales in the same quarter of 2015.

The company saw earnings gains in its Materials Solutions business, but also an 11% drop in core income for its Acetyl Chain business. Even so, Rohr said, the acetyls business was resilient in the face of a "very difficult Chinese market." He went on to call the China situation a "real pig's breakfast" where "tremendous overcapacity and the deflationary environment" have pushed down margins.

Looking forward, Rohr said the "demand picture in China has not yet resolved itself, and growth in Europe and North America remains modest."

One of the projects being tracked by Industrial Info is the $30 million debottleneck of Celanese's polyphenylene sulfide Unit No. 2 in Wilmington, North Carolina. The installation of a new reactor will increase capacity by up to 25%. Completion is expected by the end of this year.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.