Trinseo PLC (TSE) Reports Q3 2023 Financial Results: Net Sales Decrease by 25% Year-Over-Year
Trinseo PLC (NYSE:TSE) reported a 25% decrease in net sales for Q3 2023 compared to the same period in 2022.
The company's net loss from continuing operations improved by $80 million compared to the prior year.
Adjusted EBITDA of $41 million was $78 million above the prior year.
Trinseo PLC (NYSE:TSE) successfully refinanced all of its 2024 and most of its 2025 debt maturities.
Trinseo PLC (NYSE:TSE), a specialty material solutions provider, released its third quarter 2023 financial results on November 3, 2023. The company reported a 25% decrease in net sales compared to the same period in 2022. The decrease in sales was attributed to lower prices from the pass-through of lower raw material costs and lower sales volume across all reporting segments except Feedstocks, caused by persistent market demand weakness.
Financial Highlights
Trinseo PLC (NYSE:TSE) reported a net loss from continuing operations of $38 million, an improvement of $80 million compared to the prior year. This included a charge of $14 million related to the company's PMMA sheet optimization and Corporate restructuring initiatives. Adjusted EBITDA of $41 million was $78 million above the prior year, largely due to higher profitability in the Feedstocks and Plastics Solutions segments from higher styrene and polycarbonate margins.
Company Commentary
Frank Bozich, President and Chief Executive Officer of Trinseo, commented on the company's performance, stating,
As expected, we saw sequentially similar market conditions. However, we had another quarter of positive cash generation and weve taken additional operational steps to provide meaningful profitability improvement in 2024. In addition, we successfully refinanced all of our 2024 and most of our 2025 debt maturities. I wish to thank our employees for their continued efforts in executing these initiatives in this challenging environment."
Outlook for 2023
Regarding the outlook for 2023, Bozich mentioned that the forecast assumes a constrained demand environment, similar to what the company has seen throughout the year. Despite this, the company continues to take actions to improve its cost position and cash generation. Bozich added,
Our most recent cost reduction initiatives, along with lower natural gas hedge losses, are expected to result in a $100 million year-over-year profitability improvement in 2024. This enables us to continue investing in transformation projects such as polycarbonate dissolution, which offer significant growth potential even in current markets."
Financial Tables
Trinseo PLC (NYSE:TSE) reported net sales of $879 million for Q3 2023, compared to $1,178 million for the same period in 2022. The net loss from continuing operations was $38 million, compared to a loss of $118 million in Q3 2022. Diluted EPS from continuing operations was $(1.09), compared to $(3.35) in the prior year. Adjusted EBITDA was $41 million, compared to $(37) in Q3 2022.
Analysis
Despite the decrease in net sales, Trinseo PLC (NYSE:TSE) showed significant improvement in its net loss from continuing operations and adjusted EBITDA. The company's efforts to improve its cost position and generate positive cash flow, along with its successful refinancing initiatives, indicate a strategic approach to managing the challenges of the current market environment.
Explore the complete 8-K earnings release (here) from Trinseo PLC for further details.
This article first appeared on GuruFocus.
