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Huntsman Announces Second Quarter 2022 Earnings; $501 million of Buybacks in First Half of 2022

·7 min read

Second Quarter Highlights

  • Second quarter 2022 net income of $242 million compared to net income of $172 million in the prior year period; second quarter 2022 diluted earnings per share of $1.10 compared to diluted earnings per share of $0.70 in the prior year period.

  • Second quarter 2022 adjusted net income of $265 million compared to adjusted net income of $191 million in the prior year period; second quarter 2022 adjusted diluted earnings per share of $1.28 compared to adjusted diluted earnings per share of $0.86 in the prior year period.

  • Second quarter 2022 adjusted EBITDA of $432 million compared to adjusted EBITDA of $334 million in the prior year period.

  • Second quarter 2022 net cash provided by operating activities from continuing operations was $231 million. Free cash flow from continuing operations was $162 million for the second quarter 2022 compared to an outflow of $83 million in the prior year period.

  • Repurchased approximately 8.4 million shares for approximately $291 million in the second quarter 2022.

THE WOODLANDS, Texas, Aug. 2, 2022 /PRNewswire/ --



Three months ended


Six months ended



June 30,


June 30,

In millions, except per share amounts


2022


2021


2022


2021










Revenues


$ 2,362


$ 2,024


$ 4,751


$ 3,861










Net income


$ 242


$ 172


$ 482


$ 272

Adjusted net income (1)


$ 265


$ 191


$ 521


$ 338










Diluted income per share


$ 1.10


$ 0.70


$ 2.14


$ 1.07

Adjusted diluted income per share(1)


$ 1.28


$ 0.86


$ 2.47


$ 1.52










Adjusted EBITDA(1)


$ 432


$ 334


$ 847


$ 623










Net cash provided by (used in) operating activities from continuing operations


$ 231


$ (7)


$ 316


$ (23)

Free cash flow from continuing operations(2)


$ 162


$ (83)


$ 178


$ (197)










See end of press release for footnote explanations and reconciliations of non-GAAP measures.








Huntsman Corporation (NYSE: HUN) today reported second quarter 2022 results with revenues of $2,362 million, net income of $242 million, adjusted net income of $265 million and adjusted EBITDA of $432 million.

Peter R. Huntsman, Chairman, President, and CEO, commented:

"Second quarter EBITDA margins exceeded 18% on the back of our value over volume strategy, improved pricing, and solid cost control. We remain well ahead or on track to meet the targets that we presented at our Investor Day in November 2021, despite an increasingly challenging economic environment due to extremely high European natural gas prices, headwinds in China associated with government-mandated shutdowns and monetary tightening in the United States. In addition to the positive results, we repurchased approximately $500 million in shares in the first six months of the year and our balance sheet remains extremely strong with a net leverage ratio of 0.6x.

"Regardless of any macro headwinds that may impact the chemical industry in the coming quarters, our priorities around cost control, a focus on downstream businesses and returning capital to shareholders will remain unchanged. Our balance sheet and cash generation places us in an enviable position to take advantage of opportunities as they present themselves to invest in our core businesses."

Segment Analysis for 2Q22 Compared to 2Q21

Polyurethanes

The increase in revenues in our Polyurethanes segment for the three months ended June 30, 2022 compared to the same period of 2021 was primarily due to higher MDI average selling prices, partially offset by lower sales volumes. MDI average selling prices increased in all our regions. Sales volumes decreased primarily due to the extended government-mandated COVID lockdown in Shanghai, China and lower demand, partially offset by favorable comparisons in Europe due to the scheduled turnaround at our Rotterdam, Netherlands facility in the second quarter of 2021. The increase in segment adjusted EBITDA was primarily due to higher MDI margins and a gain from an insurance settlement, partially offset by lower sales volumes, the negative impact of weaker major international currencies against the U.S. dollar and lower equity earnings from our minority-owned joint venture in China.

Performance Products

The increase in revenues in our Performance Products segment for the three months ended June 30, 2022 compared to the same period of 2021 was primarily due to higher average selling prices, partially offset by lower sales volumes. Average selling prices increased primarily due to commercial excellence programs and in response to an increase in raw material costs. Sales volumes decreased primarily due to a shift in product mix based on demand and business strategy. The increase in segment adjusted EBITDA was primarily due to increased revenues and margins, partially offset by a slight increase in fixed costs.

Advanced Materials

The increase in revenues in our Advanced Materials segment for the three months ended June 30, 2022 compared to the same period of 2021 was primarily due to higher average selling prices, partially offset by lower sales volumes. Average selling prices increased largely in response to higher raw material, energy and logistics costs as well as improved sales mix. Sales volumes decreased primarily due to deselection of lower margin base resins business. The increase in segment adjusted EBITDA was primarily due to higher sales prices and improved sales mix.

Textile Effects

The decrease in revenues in our Textile Effects segment for the three months ended June 30, 2022 compared to the same period of 2021 was primarily due to lower sales volumes, partially offset by higher average selling prices. Sales volumes decreased primarily due to a deselection of certain volume as well as lower demand. Average selling prices increased in response to higher direct costs. The decrease in segment adjusted EBITDA was primarily due to lower revenues, partially offset by improved portfolio mix.

Corporate, LIFO and other

For the three months ended June 30, 2022, adjusted EBITDA from Corporate and other was a loss of $38 million as compared to a loss of $48 million for the same period of 2021. The year-over-year difference was primarily due to translational foreign currency gains related to the Chinese Yuan.

Liquidity and Capital Resources

During the three months ended June 30, 2022, our free cash flow from continuing operations was a source of cash of $162 million as compared to a use of cash of $83 million in the same period of 2021. As of June 30, 2022, we had approximately $2.1 billion of combined cash and unused borrowing capacity.

During the three months ended June 30, 2022, we spent $69 million on capital expenditures as compared to $76 million in the same period of 2021. For 2022, we expect to spend approximately $300 million on capital expenditures.

Income Taxes

In the second quarter of 2022, both our effective tax rate and our adjusted effective tax rate was 22%. We expect our 2022 adjusted effective tax rate to be approximately 22% to 24%.

Earnings Conference Call Information

We will hold a conference call to discuss our second quarter 2022 financial results on Tuesday, August 2, 2022 at 10:00 a.m. ET.

Webcast link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=E6B5RbBA

Participant dial-in numbers:
Domestic callers: (877) 402-8037
International callers: (201) 378-4913

The conference call will be accompanied by presentation slides that will be accessible via the webcast link and Huntsman's investor relations website, www.huntsman.com/investors. Upon conclusion of the call, the webcast replay will be accessible via Huntsman's website.

Upcoming Conferences

During the second quarter 2022, a member of management is expected to present at:
Jefferies Industrials Conference on August 10, 2022
Seaport Global Virtual Chemicals Conference on August 23, 2022
UBS Chemicals Conference on September 7, 2022

A webcast of the presentation, if applicable, along with accompanying materials will be available at www.huntsman.com/investors.

Table 1 -- Results of Operations












Three months ended


Six months ended



June 30,


June 30,

In millions, except per share amounts


2022


2021


2022


2021










Revenues


$ 2,362


$ 2,024


$ 4,751


$ 3,861

Cost of goods sold


1,824


1,593


3,648


3,038

Gross profit


538


431


1,103


823

Operating expenses, net


221


211


482


453

Restructuring, impairment and plant closing costs


24


11


24


35

Operating income


293


209


597


335

Interest expense, net


(16)


(18)


(30)


(37)

Equity in income of investment in unconsolidated affiliates


19


46


34


84

Fair value adjustments to Venator investment, net


-


(6)


(2)


(25)

Loss on early extinguishment of debt


-


(27)


-


(27)

Other income, net


13


9


14


16

Income from continuing operations before income taxes


309


213


613


346

Income tax expense


(67)


(42)


(132)


(76)

Income from continuing operations


242


171


481


270

Income from discontinued operations, net of tax


-


1


1


2

Net income


242


172


482


272

Net income attributable to noncontrolling interests, net of tax


(14)


(16)


(31)


(33)

Net income attributable to Huntsman Corporation


$ 228


$ 156


$ 451


$ 239










Adjusted EBITDA(1)


$ 432


$ 334


$ 847


$ 623

Adjusted net income (1)


$ 265


$ 191


$ 521


$ 338










Basic income per share


$ 1.11


$ 0.71


$ 2.16


$ 1.08

Diluted income per share


$ 1.10


$ 0.70


$ 2.14


$ 1.07

Adjusted diluted income per share(1)


$ 1.28


$ 0.86


$ 2.47


$ 1.52










Common share information:









Basic weighted average shares


205


221


209


221

Diluted weighted average shares


207


223


211


223

Diluted shares for adjusted diluted income per share


207


223


211


223










See end of press release for footnote explanations.









Table 2 -- Results of Operations by Segment
















Three months ended




Six months ended





June 30,


Better /


June 30,


Better /

In millions


2022


2021


(Worse)


2022


2021


(Worse)














Segment Revenues:













Polyurethanes


$ 1,353


$ 1,155


17 %


$ 2,739


$ 2,223


23 %

Performance Products


492


371


33 %


972


676


44 %

Advanced Materials


336


299


12 %


671


577


16 %

Textile Effects


192


207


(7 %)


389


400


(3 %)

Total Reportable Segments' Revenue


2,373


2,032


17 %


4,771


3,876


23 %














Intersegment Eliminations


(11)


(8)


n/m


(20)


(15)


n/m














Total Revenues


$ 2,362


$ 2,024


17 %


$ 4,751


$ 3,861


23 %














Segment Adjusted EBITDA(1):













Polyurethanes


$ 229


$ 208


10 %


$ 453


$ 415


9 %

Performance Products


152


88


73 %


298


151


97 %

Advanced Materials


67


58


16 %


134...