Huntsman Corporation (HUN) is a globally recognized manufacturer and marketer of differentiated and specialty chemicals. With a diverse portfolio spanning polyurethanes, performance products, and advanced materials, the company has weathered various industry headwinds and emerged as a resilient player in the chemical landscape.
Business Overview
Huntsman Corporation was founded in 1970 as a small polystyrene plastics packaging company by Jon M. Huntsman. Over the years, the company has transformed through a series of strategic acquisitions and divestitures, now owning a global portfolio of businesses with a primary focus on improving energy efficiency. The company operates through three main segments: Polyurethanes, Performance Products, and Advanced Materials.
In the early years, Huntsman grew by acquiring other chemical companies and expanding its product offerings. A significant milestone was reached in 1999 when the company formed Huntsman International LLC as its principal operating subsidiary. The company continued its growth trajectory through the 2000s, with a notable acquisition being that of Huntsman Holdings LLC in 2003.
The global financial crisis of 2008 presented a major challenge for Huntsman. The recession impacted the company's business, leading to restructuring initiatives and divestitures to streamline operations. However, Huntsman demonstrated its resilience by successfully navigating this difficult period and emerging as a more focused specialty chemicals player.
The Polyurethanes segment is a leading global manufacturer and marketer of a broad range of polyurethane chemicals, including MDI, polyols, and TPU. These products are used in a wide range of applications, from insulation and construction to automotive and footwear. The Performance Products segment has leading global positions in the manufacture and sale of amines and maleic anhydride, serving a diverse set of consumer and industrial end markets. The Advanced Materials segment is a leading global manufacturer and marketer of technologically-advanced epoxy, phenoxy, acrylic, polyurethane, and acrylonitrile butadiene-based polymer products, catering to specialized applications in aerospace, automotive, and other industries.
Huntsman's global footprint, with operations in over 30 countries, has allowed the company to navigate various regional and global challenges. The company's strategy of producing where it sells has helped mitigate the impact of trade barriers and tariffs, as the majority of its products are manufactured and sold within the same regions.
Financial Performance
Huntsman Corporation has demonstrated resilience in its financial performance, despite facing industry headwinds in recent years. In 2024, the company reported total revenues of $6.04 billion, a 1% decrease from the previous year's $6.11 billion. This slight decline was primarily attributed to lower average selling prices across all three business segments, partially offset by higher sales volumes.
The company's net loss for 2024 was $189 million, or $1.10 per diluted share, compared to a net income of $101 million, or $0.57 per diluted share, in 2023. This year-over-year decline was largely due to a number of one-time charges, including a $71 million write-off related to the separation and acquisition of assets from the SLIC joint venture, as well as $39 million in restructuring and plant closing costs.
Despite the net loss, Huntsman's adjusted EBITDA, a key measure of the company's underlying operational performance, was $414 million in 2024, down from $472 million in the prior year. The Polyurethanes segment remained the company's largest contributor, generating $245 million in adjusted EBITDA, followed by Advanced Materials at $179 million and Performance Products at $153 million.
In the most recent quarter (Q4 2024), Huntsman reported revenue of $1.45 billion, representing a year-over-year growth of approximately 3.5%. However, the company recorded a net loss of $141 million for the quarter, primarily due to lower gross profit, higher restructuring costs, and a prepaid asset write-off.
For the full year 2024, Huntsman generated operating cash flow of $285 million and free cash flow of $101 million. The company's capital expenditures for the year amounted to $184 million, demonstrating its continued investment in the business.
Huntsman's revenue is geographically diverse, with the majority coming from the U.S. and Canada (39%), Europe (26%), and Asia Pacific (27%) in 2024. This global presence helps the company mitigate regional economic fluctuations and capitalize on growth opportunities across different markets.
Liquidity
Huntsman's balance sheet remained relatively strong, with a net debt position of $1.50 billion as of December 31, 2024, compared to $1.15 billion at the end of 2023. The company's liquidity position also remained healthy, with $340 million in cash and cash equivalents and $1.20 billion in available borrowing capacity under its 2022 Revolving Credit Facility.
The company's debt-to-equity ratio stood at 0.26 as of December 31, 2024, indicating a conservative capital structure. Huntsman also maintains additional liquidity through its accounts receivable securitization programs, with $150 million available under its U.S. program and $100 million under its European program.
Huntsman's current ratio of 1.36 and quick ratio of 0.79 suggest that the company has adequate short-term liquidity to meet its immediate obligations. These financial metrics, combined with the available credit lines, provide Huntsman with financial flexibility to navigate market uncertainties and pursue strategic initiatives.
Operational Initiatives and Strategic Pivots
In response to the challenging industry environment, Huntsman has undertaken several strategic initiatives to optimize its cost structure and asset footprint. The company has announced the closure and relocation of multiple facilities, including its Everberg, Belgium R&D and European headquarters, as well as system houses in Malaysia, Thailand, Indonesia, Italy, and the UK. These actions are expected to result in annualized cost savings and synergy benefits in excess of $280 million.
Additionally, Huntsman has been actively managing its portfolio, with the sale of its Textile Effects business in 2023 for $597 million. The company has also announced a strategic review of its maleic anhydride business in Europe, as it seeks to align its asset base with the evolving demand landscape and customer needs.
In the Polyurethanes segment, Huntsman has continued to focus on growing its differentiated product offering, including MDI-based systems and TPU. The company's recent investments in a splitter facility in Geismar, Louisiana, and its joint venture in China to produce PO and MTBE, are expected to enhance its position in these higher-margin products.
Huntsman has demonstrated a strong commitment to cost reduction and operational efficiency. The company successfully delivered on its previously announced cost initiatives, cutting costs by over $40 million in less than 12 months. These actions have more than offset over $150 million of global inflationary costs since 2022 and reduced SG&A by more than 6%. Huntsman plans to continue these efforts throughout 2025, with a focus on minimizing cost structure, optimizing asset footprint, and aggressively pushing for margin expansion across all segments.
Outlook and Challenges
Looking ahead, Huntsman faces a mixed outlook, with signs of recovery in certain markets but ongoing challenges in others. In the Polyurethanes segment, the company expects to see continued volume growth, driven by a gradual recovery in demand, particularly in North America. However, the European market is expected to remain relatively flat, with the company's Rotterdam facility facing a 40-day turnaround in the first half of 2025.
In the Performance Products segment, Huntsman anticipates a gradual improvement in margins throughout 2025, driven by the recovery in the construction industry and the ramp-up of new capacity in Conroe, Texas, to serve the semiconductor industry. The Advanced Materials segment, known for its stability, is expected to continue its solid performance.
For the first quarter of 2025, Huntsman expects volume growth of around 5% year-over-year in the Polyurethanes segment. However, the Performance Products segment is anticipated to face headwinds, with EBITDA expected to be 25-35% lower year-over-year, primarily due to the drop-off in profitability at the company's maleic facility in Europe.
Huntsman's management has also highlighted the potential impact of tariffs and trade actions, which could affect the company's operations and customer demand. The company is closely monitoring these developments and remains focused on optimizing its global asset footprint to mitigate any potential disruptions.
The company expects its 2025 supply chain financing program to provide a $30 million benefit. Additionally, Huntsman remains committed to maintaining its dividend, which management views as "near sacred," providing a steady return to shareholders despite market volatility.
While Huntsman has not provided specific full-year 2025 financial guidance due to market and geopolitical uncertainties, the company's focus on cost optimization, portfolio management, and margin expansion positions it well to navigate the challenging environment.
Conclusion
Huntsman Corporation has demonstrated its resilience in the face of industry challenges, leveraging its diversified portfolio, global footprint, and strategic initiatives to navigate the evolving market landscape. While the company has faced some short-term headwinds, its focus on cost optimization, portfolio management, and differentiated product development positions it well for long-term success.
The company's strong liquidity position, combined with its ongoing cost reduction efforts and strategic investments, provides a solid foundation for future growth. As Huntsman continues to execute on its strategic priorities, investors will be closely watching the company's ability to capitalize on emerging opportunities, drive margin expansion, and deliver sustainable growth in an increasingly competitive and uncertain global chemical market.