Materials
Chemicals
$7.22B
12K
Celanese Corporation, a chemical and specialty materials company, manufactures and sells high performance engineered polymers in the United States and internationally. It operates through Engineered Materials and Acetyl Chain. The Engineered Materials segment develops, produces, and supplies specialty polymers for automotive and medical applications, as well as for use in industrial products and consumer electronics. The Acetyl Chain segment produces and supplies acetyl products, including acetic acid, vinyl acetate monomers, acetic anhydride, and acetate esters that are used as starting materials for colorants, paints, adhesives, coatings, and pharmaceuticals; and organic solvents and intermediates for pharmaceutical, agricultural, and chemical products. It also offers vinyl acetate-based emulsions for use in paints and coatings, adhesives, construction, glass fiber, textiles, and paper applications; and ethylene vinyl acetate resins and compounds, as well as low-density polyethylene for use in flexible packaging films, lamination film products, hot melt adhesives, automotive parts, and carpeting applications. In addition, it provides redispersible powders (RDP) for use in construction applications, including flooring, plasters, insulation, tiling, and waterproofing. Celanese Corporation was founded in 1918 and is headquartered in Irving, Texas.
Key insights and themes extracted from this filing
Net sales were $2,651 million compared to $2,795 million in the same period last year. This decrease was primarily driven by lower pricing and volume in both the Engineered Materials and Acetyl Chain segments.
Operating profit was $250 million compared to $335 million in the same period last year. This decrease was primarily due to lower net sales and an unfavorable impact to Other (charges) gains, net primarily related to restructuring costs.
Equity in net earnings of affiliates was $51 million compared to $23 million in the same period last year. This increase was primarily due to an increase in earnings from Mylar Specialty Films and Ibn Sina strategic affiliates.
The formation of the Nutrinova joint venture with Mitsui & Co. in September 2023 led to lower volume in the Engineered Materials segment. The company retained a 30% interest in the joint venture.
In October 2023, the Company announced the intended closure of its Polyamide 66 and High-Performance Nylon polymerization units at its facility in Uentrop, Germany to optimize production costs across its global network.
On February 29, 2024, the Company announced the intended closure of its facility in Mechelen, Belgium to optimize production costs across its global network.
The company is actively managing its business to maintain and improve cash flow and reduce debt, and believes that liquidity from the above-referenced sources will be sufficient to meet operational and capital investment needs and financial obligations for the foreseeable future.
In furtherance of these deleveraging efforts, we have paused our share repurchase program and are in the process of evaluating additional cash generation opportunities which may also include, in addition to the food ingredients joint venture described above, additional opportunistic dispositions or monetization of other product or business lines or other assets.
We have focused our near-term capital expenditures on required maintenance projects, productivity improvements, and selected short term growth projects, as we continue to prioritize deleveraging and expect total capital expenditures to be approximately $425 million in 2024.
We experienced challenging demand conditions across several end-markets. We continue to closely monitor the impact of, and responses to, geopolitical effects on demand conditions and the supply chain. Demand conditions and incremental industry production capacity resulted in elevated industry competitive dynamics and continuing pricing pressure across end-markets.
Capital controls impose limitations on our ability to exchange currencies, repatriate earnings or capital, lend via intercompany loans or create cross-border cash pooling arrangements.
The company is involved in legal and regulatory proceedings, lawsuits, claims and investigations incidental to the normal conduct of its business, relating to such matters as product liability, land disputes, insurance coverage disputes, contracts, employment, antitrust and competition, intellectual property, personal injury and other actions in tort, workers' compensation, chemical exposure, asbestos exposure, taxes, trade compliance, acquisitions and divestitures, claims of current and legacy shareholders, past waste disposal practices and release of chemicals into the environment.
Demand conditions and incremental industry production capacity resulted in elevated industry competitive dynamics and continuing pricing pressure across end-markets. We expect demand challenges to persist and to pressure pricing, which effects we anticipate to be partially offset by improvement in input costs across the year.
The Company manages its Acetyl Chain business segment by leveraging its ability to sell chemicals externally to end-use markets or downstream to its acetate tow, intermediate chemistry, emulsion polymers, redispersible powders and ethylene vinyl acetate polymers businesses.
The Company manages its Engineered Materials business segment through its project management pipeline, which is comprised of a broad range of projects that are solutions-based and are tailored to each customer's unique needs.
The company is actively managing its business to maintain and improve cash flow and reduce debt, and believes that liquidity from the above-referenced sources will be sufficient to meet operational and capital investment needs and financial obligations for the foreseeable future.
On February 29, 2024, we announced the intended closure of our facility in Mechelen, Belgium to optimize production costs across our global network.
In October 2023, we announced the intended closure of our Polyamide 66 and High-Performance Nylon polymerization units at our facility in Uentrop, Germany to optimize production costs across our global network.
As a recognized innovator in the chemicals industry, we engineer and manufacture a wide variety of products essential to everyday living.
We continue to see the investments made in recent years strengthen the growth and reliability, while lowering the carbon footprint, of our manufacturing network to best serve our customers.
Therefore, the Company's strategic focus is on executing within this integrated chain model and less on driving product-specific revenue.
In furtherance of these deleveraging efforts, we have paused our share repurchase program and are in the process of evaluating additional cash generation opportunities which may also include, in addition to the food ingredients joint venture described above, additional opportunistic dispositions or monetization of other product or business lines or other assets.
We have focused our near-term capital expenditures on required maintenance projects, productivity improvements, and selected short term growth projects, as we continue to prioritize deleveraging and expect total capital expenditures to be approximately $425 million in 2024.
We are committed to rapid deleveraging and to maintaining our investment grade debt rating.
We continue to see the investments made in recent years strengthen the growth and reliability, while lowering the carbon footprint, of our manufacturing network to best serve our customers.
Potential liability for remedial actions and increased costs under existing or future environmental, health and safety regulations, including those relating to climate change or other sustainability matters.
The Company is subject to environmental laws and regulations worldwide that impose limitations on the discharge of pollutants into the air and water, establish standards for the treatment, storage and disposal of solid and hazardous wastes, and impose record keeping and notification requirements.
We experienced challenging demand conditions across several end-markets. We continue to closely monitor the impact of, and responses to, geopolitical effects on demand conditions and the supply chain.
Demand conditions and incremental industry production capacity resulted in elevated industry competitive dynamics and continuing pricing pressure across end-markets.
We are subject to capital controls and exchange restrictions imposed by the local governments in certain jurisdictions where we operate, such as China, South Korea, India and Indonesia.