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Huntsman CORP (HUN)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue rose 3% YoY to $1.45B but fell sequentially vs Q3, with adjusted EBITDA of $71M and adjusted EPS of -$0.25; GAAP diluted EPS was -$0.82 as trough conditions persisted in core markets .
  • Polyurethanes drove YoY growth on higher volumes and improved margins, while Performance Products was impacted by extended maleic anhydride outages; Advanced Materials was roughly flat on EBITDA despite higher volumes .
  • 2025 outlook leans on cost actions (workforce reductions in PU, closing downstream facilities), potential strategic actions on European maleic anhydride, and early signs of MDI pricing recovery; management expects 2025 adjusted ETR ~35% and capex of ~$180–$190M .
  • Potential stock catalysts: execution on price increases (at least $0.10/lb announced in U.S. MDI), strategic decision on European maleic anhydride, and seasonal demand/pricing uplift into Q2; dividend remains a priority ($0.25/share declared Nov 2024) .

What Went Well and What Went Wrong

  • What Went Well

    • Polyurethanes volume gains and margin improvement; insulation and composite wood panel markets showed demand and share gains; segment also benefited from lower fixed/variable costs .
    • Management signaled early signs of recovery in MDI pricing; China polymeric MDI prices at ~3‑year highs and U.S. price increases announced; “more positive than negative movement” in MDI industry .
    • Strong Q4 free cash flow ($108M) and operating cash flow ($159M) with improved working capital; combined cash + undrawn capacity ~$1.7B at year-end .

  • What Went Wrong

    • Performance Products saw lower volumes (maleic outages; slow construction/industrial) and EBITDA down YoY; segment revenue -8% YoY and EBITDA -18% YoY in Q4 .
    • Europe remains challenged: high energy costs, overregulation, and excess capacity; management moving to close downstream PU facilities and reviewing European maleic anhydride .
    • Equity income headwind expected in 2025 (PO/MTBE margins deterioration and one-off dividend in 2024); slide commentary referenced ~$75M YoY drag to affiliate dividends .

Financial Results

MetricQ2 2024Q3 2024Q4 2023 (YoY Base)Q4 2024
Revenue ($USD Millions)$1,574 $1,540 $1,403 $1,452
Net Income Attributable to HUN ($M)$22 $(33) $(71) $(141)
Diluted EPS (GAAP)$0.13 $(0.19) $(0.41) $(0.82)
Adjusted Net (Loss) Income ($M)$24 $17 $(36) $(43)
Adjusted Diluted EPS$0.14 $0.10 $(0.21) $(0.25)
Adjusted EBITDA ($M)$131 $131 $44 $71
Net Cash from Ops – Cont. Ops ($M)$55 $134 $166 $159
Free Cash Flow – Cont. Ops ($M)$5 $93 $83 $108

Segment performance (Q4 2024 vs Q4 2023):

SegmentRevenue Q4’23 ($M)Revenue Q4’24 ($M)YoYAdj. EBITDA Q4’23 ($M)Adj. EBITDA Q4’24 ($M)YoY
Polyurethanes895 970 +8% 13 50 +285%
Performance Products260 239 -8% 28 23 -18%
Advanced Materials251 254 +1% 38 37 -3%
Corporate/LIFO/Other———(35) (39) (11%)

Margins and balance sheet KPIs:

KPIQ2 2024Q3 2024Q4 2024
Gross Profit ($M)243 234 188
Gross Margin (%)15.4% (calc)15.2% (calc)12.9% (calc)
Adjusted EBITDA Margin (%)8.3% (calc)8.5% (calc)4.9% (calc)
Capex – Cont. Ops ($M)50 41 51
Cash ($M)335 330 340
Total Debt excl. affiliates ($M)1,920 1,859 1,835
Net Debt excl. affiliates ($M)1,585 1,529 1,495

Notes: Gross margin and EBITDA margin are calculated from cited revenues, gross profit, and adjusted EBITDA .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance/CommentaryChange
CapexFY 2025—~$180–$190M expected New
Adjusted Effective Tax RateFY 2025—~35% expected New
DividendQ4 2024—$0.25/share declared Nov 5, 2024 Maintained
Polyurethanes volumesQ1 2025—YoY volume growth ~5% expected New
PU price increases (MDI)1H 2025—At least $0.10/lb announced in U.S. New
Performance Products marginsQ1 2025—Down YoY near term (maleic Europe), gradual improvement through 2025 with Conroe/Hungary contributions New
Equity affiliate dividendsFY 2025—~$75M YoY headwind (MTBE margin weakness and one-off JV dividend in 2024) New
Maleic anhydride (Europe)2025—Strategic options under review; decision expected “in short order” New
Downstream PU footprint (EU)2025—Announced closures; continued optimization of system houses New
Notes repaymentQ1 2025—Repay European notes with cash; no refi planned New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024 and Q3 2024)Current Period (Q4 2024)Trend
MDI pricing and demandQ2: Lower MDI ASPs outweighed higher volumes; discipline on pricing . Q3: Stable trough, lower MDI ASPs, volumes +5% YoY .Early signs of pricing recovery; China polymeric MDI ~3-yr highs; U.S. price increases announced .Improving
Europe energy/regulatoryQ2: Noted competitive pressure in Europe; macro caution . Q3: Expect trough into seasonally lower Q4 .Europe “highly compromised” (energy, regulation, capacity); footprint reductions in PU; strategic review of maleic .Worsening/Restructuring
Performance ProductsQ2: Prices under pressure; higher volumes; EBITDA down YoY . Q3: Volumes up; prices down; EBITDA down YoY .Q4 impacted by maleic outages; near-term Q1 margin down vs LY; improvement later in 2025 as Conroe/Hungary ramp .Near-term weaker, improving later
Cash/FCF/Balance sheetQ2 FCF $5M; strong liquidity . Q3 FCF $93M; ~$1.7B cash + capacity .Q4 FCF $108M; ~$1.7B combined liquidity; notes payoff planned; supply chain finance ~$30M 2025 benefit .Stable/Supportive
Tariffs/TradeLimited in Q2/Q3.U.S. tariff environment likely supportive; anti-dumping probe on Chinese MDI could be additive to tariffs .Potential tailwind
Semiconductor/Tech exposureNot highlighted in Q2; Q3 commentary limited.Conroe, TX expansion to serve chip industry solvents; customer qualifications underway .Building exposure

Management Commentary

  • “The fourth quarter was within our expectations as trough conditions continued… We will remain aggressive in costs… assessing strategic options for our European maleic anhydride business as well as closing downstream Polyurethanes facilities… creating a leaner Company that will have substantial operating leverage when demand… improves.” — Peter R. Huntsman, CEO .
  • “We’re seeing some early signs of recovery in pricing… publicly reported polymeric MDI prices in China at a 3-year high… Huntsman has also announced a series of price increases in North America.” .
  • “Performance Products will be gradually improving throughout the year… recovery in construction (maleic)… Conroe, Texas expansion serving the chip industry… qualifications underway.” .
  • “Europe… highly compromised from a combination of high energy costs, overburdening regulation, and excess capacity.” .
  • “Dividend is near sacred to us… objective is to cover that dividend [in 2025] and then some.” .

Q&A Highlights

  • PU downstream footprint and Europe: Company will align system houses with demand and relocate capacity toward U.S./Asia; removing excess capacity where Europe deindustrialization shrinks demand .
  • European maleic anhydride: Strategic options under review; received inbound interest; Europe increasingly competitive due to imports; decision expected “in short order” .
  • PU outlook: Expect ~5% YoY volume growth in Q1 2025; announced at least $0.10/lb price increase in U.S.; aim to secure price without sacrificing share .
  • Performance Products: Q1 EBITDA down YoY given European maleic weakness; improvement later in 2025 as Conroe and Petfurdo catalysts ramp; destocking in amines lagged and should normalize .
  • Capital allocation and leverage: Repay European notes in Q1 2025 (no refi); comfortable with ~$1.5B long-term debt; maintain 6% yield dividend at trough; evaluate buybacks/M&A when FCF exceeds dividend .

Estimates Context

  • Wall Street consensus from S&P Global (EPS, revenue, EBITDA) for Q4 2024 could not be retrieved at this time due to SPGI request limits; therefore, explicit “vs. consensus” comparisons are unavailable. We attempted to fetch Primary EPS Consensus Mean, Revenue Consensus Mean, and EBITDA Consensus Mean for Q4 2024 [SPGI request limit encountered].

Key Takeaways for Investors

  • Pricing leverage emerging in MDI: Management cited 3-year highs in China polymeric MDI and announced U.S. increases; if realized into Q2, this is a key earnings lever alongside seasonal demand .
  • Portfolio actions intensify: Workforce reductions in PU, closures of downstream EU facilities, and maleic anhydride strategic review target structurally weak European profitability; execution should lift mid-cycle margins .
  • Cash/Dividend support: Q4 FCF $108M and ~$1.7B liquidity underpin dividend resilience; notes repayment in Q1 de-risks maturity profile .
  • Near-term headwinds vs. 2H recovery: Performance Products faces Q1 margin pressure (maleic Europe) but contributions from Conroe/Hungary and normalization of amines should aid 2H .
  • Tariff/AD overlays may help U.S. MDI economics; ITC/Commerce processes could add to existing tariffs over time, supporting domestic margins .
  • Watch Q2: Seasonal construction and PU pricing realization are critical; management expects sequential improvement into Q2 if invoices reflect announced price increases .
  • Segment mix: Polyurethanes drove Q4 YoY gains; sustaining this while stabilizing Performance Products and maintaining Advanced Materials margins is central to 2025 trajectory .