Huntsman's Quarterly Profits Double, May Push Back Completion of U.S. Ethylene Oxide Project

Researched by Industrial Info Resources (Sugar Land, Texas)--Huntsman Corporation (NYSE:HUN) (The Woodlands, Texas) saw its second-quarter net income more than double to $124 million from $54 million the year before, largely due to increased demand for methylene diphenylene diisocyanate (MDI) and amines, as well as higher selling prices, the chemicals producer said. Revenues for the quarter increased 5.6% to $2.99 billion.

Industrial Info is tracking 46 Huntsman capital and maintenance projects, with a combined value of $487 million. In its earnings report, the company reported capital expenditures for the quarter totaled $107 million, and expects to spend about $500 million on capital expenditures in 2014.

However, Chief Executive Officer Peter Huntsman said during the company's earnings conference call that completion of its ethylene oxide (EO) expansion project is likely to be pushed back pushed back by one or two quarters into the second half of 2015.

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Completion of Huntsman's EO F-8 Unit Addition at its Port Neches, Texas facility is currently scheduled for second-quarter 2015. The project to increase EO capacity by 265 million pounds (132.5 tons) per year carries a total investment value of $150 million.

Peter Huntsman said: "On the EO expansion in North America ... we were talking about more of a first or second quarter 2015. I would imagine that would be closer to third to fourth quarter 2015, probably fourth quarter." He said longer-than-expected third-party engineering were causing the potential pushback of the completion.

Industrial Info is also tracking Huntsman's Shanghai MDI unit addition in Shanghai, China, worth $157 million. Huntsman will build a 240,000-metric-ton-per-year unit, with a construction kick off in second-quarter 2015 and project completion in second-quarter 2017.

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During the second quarter, higher sales volumes by the company's Polyurethanes segment (including MDI) drove a 5% revenue increase to $1.3 billion. However, a disruption at Huntsman's Oxides and Olefins Plant in Port Neches resulted in lower earnings before interest, taxes, depreciation and amortization (EBITDA) of $10 million.

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Meanwhile, Peter Huntsman said that more concessions have been offered to the European Commission (EC) in Huntsman's attempt to complete its $1.1 billion acquisition of Rockwood Holdings Incorporated's (NYSE:ROC) Performance Additives and Titanium Dioxide (TiO2) businesses. The EC is investigating whether the acquisition would drive up TiO2 prices. Huntsman said the additional concessions would cost his company $5 million to $10 million in annual EBITDA.

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