Earnings call transcript: Huntsman Q1 2025 misses EPS forecast, stock drops

Huntsman Corporation reported its first-quarter 2025 earnings, revealing a slight miss in its earnings per share (EPS) compared to analysts’ expectations. The company posted an EPS of -$0.11, slightly below the forecast of -$0.10. Revenue also fell short at $1.41 billion against the expected $1.5 billion. Following the announcement, Huntsman’s stock dropped 9.35%, closing at $13.37, reflecting investor concerns over the company’s performance and market conditions. According to InvestingPro data, the company’s current market capitalization stands at $2.12 billion, with the stock trading near its 52-week low of $11.90. Despite recent challenges, InvestingPro analysis suggests the stock is currently undervalued based on its Fair Value model.

Key Takeaways

• Huntsman’s Q1 2025 EPS was -$0.11, missing forecasts by $0.01.
• Revenue came in at $1.41 billion, below the $1.5 billion forecast.
• Stock price fell 9.35% post-earnings announcement.
• Inventory levels increased by $100 million sequentially.
• The company is doubling its cost savings target to $100 million.

Company Performance

In the first quarter of 2025, Huntsman faced significant market uncertainty, leading to a challenging financial performance. The company reported a sequential increase in inventory by $100 million, highlighting operational challenges amid volatile market conditions. Despite these hurdles, Huntsman is strategically positioning itself by consolidating operations and optimizing its manufacturing footprint, particularly in Europe.

Financial Highlights

• Revenue: $1.41 billion, below the forecasted $1.5 billion.
• Earnings per share: -$0.11, missing the forecast of -$0.10.
• Net debt: $1.5 billion with liquidity of $1.3 billion.

Earnings vs. Forecast

Huntsman’s actual EPS of -$0.11 was a minor miss compared to the forecast of -$0.10. The revenue shortfall of $90 million from the expected $1.5 billion reflects the company’s struggles to meet market expectations. This slight miss in EPS, while not substantial, contributes to the overall negative sentiment surrounding the company’s financial health.

Market Reaction

Following the earnings announcement, Huntsman’s stock experienced a significant decline, dropping 9.35% to close at $13.37. This movement takes the stock closer to its 52-week low of $11.90, indicating investor apprehension about the company’s ability to navigate current market challenges. The stock’s performance is in contrast to broader market trends, where many peers have shown resilience amid economic uncertainties. InvestingPro data reveals the stock has declined nearly 37% over the past six months, though it maintains a notable dividend yield of 7.48% and has consistently paid dividends for 19 consecutive years. For deeper insights into Huntsman’s valuation and comprehensive analysis, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.

Outlook & Guidance

Huntsman refrained from providing full-year guidance due to ongoing market volatility. However, the company anticipates a better performance in the second half of 2025, driven by potential volume recovery and improved margins from falling raw material prices. The company is also focused on capitalizing on short-term changes and aligning costs with longer-term market realities. InvestingPro analysis shows multiple positive indicators, including expected net income growth this year and analysts’ predictions of profitability in 2025. Subscribers to InvestingPro can access 8 additional ProTips and comprehensive financial metrics to make more informed investment decisions.

Executive Commentary

CEO Peter Huntsman emphasized the company’s focus on adapting to market changes, stating, "We are focused on capitalizing on the short-term changes and volatility, aligning our cost to longer-term market realities." CFO Phil Lister reassured stakeholders about the company’s financial position, noting, "Our liquidity is $1.3 billion and is also ample, and we’ll do all the relevant things that you’d expect to adequately protect the balance sheet."

Risks and Challenges

• Market volatility and trade uncertainties, particularly around the MDI market.
• Increased inventory levels impacting cash flow.
• Weakness in residential construction affecting demand.
• Complex tariff landscape for MDI imports.
• Challenges in the European market due to operational restructuring.

Q&A

During the earnings call, analysts inquired about the impact of trade policies on the MDI market and the company’s strategies to manage inventory and demand disconnects. Executives addressed these concerns, highlighting ongoing efforts to optimize operations and adapt to the evolving market landscape.

Full transcript - Huntsman (HUN) Q1 2025:

Conference Operator: Greetings, and welcome to the Huntsman Corporation First Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr.

Ivan Mancusa, Vice President of Investor Relations and Corporate Development. Please go ahead, sir.

Ivan Mancusa, Vice President of Investor Relations and Corporate Development, Huntsman Corporation: Thank you, Melissa, and good morning, everyone. Welcome to Huntsman’s first quarter twenty twenty five earnings call. Joining us on the call today are Peter Huntsman, Chairman, CEO and President and Phil Lister, Executive Vice President and CFO. Yesterday, 05/01/2025, we released our earnings for the first quarter twenty twenty five via press release and posted to our website, huntsman.com. We also posted a set of slides and detailed commentary discussing the first quarter twenty twenty five on our website.

Peter Huntsman will provide some opening comments shortly, and we will then move to a question and answer session for the remainder of the call. During the call, let me remind you that we may make statements about our projections or expectations for the future. All such statements are forward looking statements, while they reflect our current expectations, they involve risks and uncertainties and are not guarantees of future performance. You should review our filings with the SEC for more information regarding the factors that could cause actual results to differ materially from these projections or expectations. We do not plan on publicly updating or revising any forward looking statements during the quarter.

We will also refer to non GAAP financial measures such as adjusted EBITDA, adjusted net income or loss and free cash flow. You can find reconciliations to the most directly comparable GAAP financial measures in our earnings release, which has been posted to our website at huntsman.com. I’ll now turn the call over

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: to Peter Huntsman. Ivan, thank you very much. Just over two months ago at our last earnings call, I started my comments by explaining why we did not give yearly guidance, but rather focused on quarterly guidance. And that was just before the April when Liberation Day liberated the New York Stock Exchange to some $3,000,000,000,000 of value before reciprocal tariffs, ninety day pauses and 500 plus percent tariff rates were put on most goods flowing between the world’s two largest and interdependent economic systems along with varying degrees of tariffs on just about every trade flow in the world. Today, I’m not sure if we can tell you what’s going to be happening between now and the end of the week in either the macro economy or our own petrochemical industry.

I would assume that most CEOs who have already reported their numbers, if they were to report again today, would be changing their outlook. I want to see if we can take and make some sense as far as what we are seeing as far as what is happening today and some of the longer term implications for Huntsman that we see as of today. Much of what we are seeing in our supply chains is a literal disconnect between orders and downstream demand. We see build rates for cars dropped low single digit percentages. And by the time the supply chains move through OEMs and down to us, we are seeing double digit drops in some order patents.

It is not unlike what happens when someone taps the brakes on a fast moving freeway and the car behind them applies greater pressure. Three or four cars further back, cars are literally skidding to a halt. Now I do not see vehicle production, housing materials, airplanes and power grid components dropping by double digit margins. However, I am seeing in the past few weeks suppliers panic and in a world of great and changing uncertainties, lowering inventories, preserving working capital and stopping supply chains, especially those moving overseas. Will these conditions remain permanent?

I think that is very highly unlikely. I would see a scenario not unlike 2020 when supply chains and inventories froze and the world stood in a state of paralysis as consumers, manufacturers and suppliers tried to make sense of the short term. I see much, if not all of the short term supply and demand issues driven largely by the unknown and uncertain conditions likely being resolved in the next few months as trade deals get done, alternate supply lines and sources emerge and the dust from Liberation Day finally settles. Other aspects of this will be longer lasting. North American MDI tariffs is a good example.

This past year, nearly 400,000 tons were imported into The United States and The Americas market with about 75% of that coming from China. This represents between 2025% of the total domestic demand for the entire year. Just in the month of January of this year, more than twice the amount of MDI that was imported a year ago was imported into The United States. By the end of the quarter, in March, imports had dropped by 60% into The Americas and greater than 75% from China. And it appears that this drop will continue into the second quarter as only one kiloton of MDI from China came into The Americas in the April.

These tariffs seemingly are larger longer term in nature, and I believe may have a greater impact on The Americas. Huntsman produces virtually all of our Americas material in North America. We’re in an ideal location to benefit from this. More specifically, during the latter part of the first quarter of this year, as shipments from China were canceled, there seemed to be an oversupply of MDI on the Asian markets. Chinese MDI prices fell as did raw materials.

However, in the past week, these prices have stabilized and have actually recovered by 10%. Again, as we are well situated in our Chinese business as all of our MDI supply is domestically produced with an excellent team of local associates that operate this business. Again, how long will this last? No one knows. But orders seems to slowly be coming about in China and The Americas markets.

Europe, on the other hand, is still trying to figure out if they have or even want an industrial policy. More to come on that one, no doubt. I do not see the impact of tariffs having a material impact, a direct material impact on our Performance Products and Advanced Materials divisions. I can’t clearly see what impact this will have on our customers’ end markets such as power and aerospace, but things seem to be moving towards a slightly more confident place than they were just a week ago. This past quarter, I told you that I thought we were seeing the bottom of MDI pricing or better put margins as we had seen announced price increases across The U.

S, EU and China. I continue to believe this, though there may be a bit choppiness in the numbers. The MDI markets may well be seeing better margin expansion from falling raw material prices than from rising MDI prices. However, volumes will be of greatest importance. The present market uncertainties do not provide us or our customers confidence for longer term inventory build and volume increase.

We continue to be frustrated by the lack of a clear and realistic energy in European wide industrial policy, which is needed to encourage investment by us and others in Europe. We will continue to aggressively look at our cost and organizational structure and calibrate that to a shrinking industrial base as we see more companies struggling under the burden of high energy costs, taxes and regulation. In short, we will not be waiting for the market to turn in our favor and we’ll continue to take the steps necessary to have a value creating business in Europe. We also continue to look for opportunities around the world that may provide a chance to increase our product footprint. While we are careful to protect our balance sheet, we will continue to assess our assets and explore possible opportunities in the marketplace to create shareholder value faster than just waiting for a market recovery.

In short, we are focused on capitalizing on the short term changes and volatility, aligning our cost to longer term market realities and exploring various options to enhance our portfolio and create greater shareholder value. With that, operator, we’ll open the line up for any questions.

Conference Operator: Thank you. Our first question comes from the line of Kevin McCarthy with Vertical Research Partners. Please proceed with your question.

Kevin McCarthy, Analyst, Vertical Research Partners: Yes. Thank you and good morning. Peter, I appreciate your description regarding what I would call a bullwhip effect. It strikes me that one of the things that might be a little bit different today is inventory levels are generally leaner than they were a few years ago. So I was wondering if you could speak to that.

Where are you seeing the most pronounced bullwhip effect or volume reductions? And where do you think there might be pockets of inventory more elevated or leaner would be my first question. Thank you.

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Yes. Kevin, thank you very much. Excellent question because that really strikes to the heart of the here and the now. I mean, we are seeing a bullwhip effect, I will say that I’m not trying to contradict the guidance that we’ve given to second quarters. I sit here today and look at that guidance in the second quarter, I firmly believe in that.

But by the end of the second quarter, we may well be seeing an inflow of orders that may have a material change on that outlook. Again, I think it’s important that we give you the clearest view that we have as of today and what we’re seeing today. But as I look at what I would say our order patterns versus reality, reality being how many cars are actually being built, how many cars are actually being sold. And there’s no doubt that there’s a low single digit movement in the number of cars that are being produced. There are some builders that are slowing production down in Mexico, for example.

But in the overall scheme of what we’re seeing in the automotive industry, it’s not more than just a few percentage points drop in production as we sit here today. We’re seeing raw materials in some applications, not across the board, but in some applications drop as much as 15% to 20% downward just in the last week or two. Now again, how much of this is inventory fluctuation? How much of this is just setting something in place? But there is a massive disconnect as far as what’s being ordered and what’s being produced.

I don’t believe that there’s a lot of inventory sitting in the auto supply chain. I would say the same thing applies to aerospace. I look at the number of planes that are being built versus the number of planes that are being delivered. Again, those are two completely different numbers. And then the supply chain as far as how many fuselages, wings and so forth, tail sections, that are being built.

This is one of the best end markets in our entire business is aerospace. And you would think with a customer base largely built on the backs of two companies that have multiyear backorders, that you would see one of the most consistent and reliable supply chains in any of our end use markets. So I think on a yearly basis, it almost quite flat. On a quarterly basis, there’s quite a bit of volatility. On a monthly basis, it’s all over the place.

And so as I look at the auto, as I look at aerospace, I would even say the same applies to the downstream construction materials. I look at the number of homes that are being built, the number of homes that are being sold and I compare that with products that are going to various applications, whether it’s insulation or appliances and so forth, and you see much greater volatility. So Kevin, I’m sorry, long winded answer, but I think it probably gets too hard what a lot of people out there are really thinking. How do you match today’s drop off in demand with the reality of what’s actually being consumed in the broader market? The simple fact of the matter is the only parallel I’ve seen in the last fifteen, twenty plus years is really 2020, when we saw a very, very rapid sudden drop off in COVID.

And subsequently, we saw, in your words, this bullwhip effect, that came back in the latter part of 2020 and went all the way up through 2021.

Kevin McCarthy, Analyst, Vertical Research Partners: Thank you for that, Peter. And then as a follow-up, would you hazard a guess as to how much the total company volume might have been down if it was down in the month of April and how the order books are shaping up for May?

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Yes. I’d want to I’d want to look a little bit more closely at that. I think when you’d be looking across the board at all of the businesses, January and February for us would have been what I would say would be months that were on target and we’re meeting expectation. We really saw a great deal of volatility around those orders in the month of March and going into April. And as I say, it’s obviously, we’re in the very May.

Not a great deal of visibility right now, but it seems like the dust is gradually starting to settle. So a lot of metaphors in there without giving you exact numbers, and I don’t have the exact numbers on the volume of the pricing. But as we look into the second quarter, our single largest variable in the second quarter is going to be around what actually happens with volumes, order pounds and prices. And I will just say that I am not aware of any large customers that we have lost during this time period as well. I say that because I believe that what we’re seeing is a lot of what a lot of other people are

Phil Lister, Executive Vice President and CFO, Huntsman Corporation: probably seeing the same thing.

Conference Operator: Thank you. Our next question comes from the line of Patrick Cunningham with Citi. Please proceed with your question.

Patrick Cunningham, Analyst, Citi: Hi, good morning. The trade uncertainty is clearly overwhelming everything, but one of the goals is to increase U. S. Manufacturing and maybe you’ll get some tailwinds for housing and infrastructure. How do you view the growth potential longer term if the policies work as intended?

And how might you further reposition your asset footprint if we live in this protectionist world?

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Well, I’m not sure that as we look at our asset footprint, I continue to see kind of some vague question marks around Europe. But if you okay, I’m probably oversimplifying things. If you kind of look at a more protectionist view in China and a more protectionist view in America, I mean China certainly started five, six years ago of increasing their industrial capacity, domesticating their industrial capacity and so forth and becoming less reliant on imports, largely doing what The U. S. Is today.

The vast majority of what we sell, the vast majority of where we make money, is in domestically produced product, both in North America and in Asia. So I don’t see us having to change our footprint, if you will, manufacturing or otherwise, to try to calibrate around where things seemingly are going. Now again, that may have an impact on our downstream demand on some of our products and so forth. But I think that we’re in a pretty good position ourselves. You did mention the construction markets.

And I would think that the single biggest issue probably certainly longer term, even more so than tariffs. I think tariffs, you will recalibrate and we’ll be able to work our way through tariffs. The single biggest impact that we see between now and the end of the year on our earnings would be an improvement and a pickup in the North American residential and commercial construction.

Patrick Cunningham, Analyst, Citi: Understood. Very helpful. And could you provide an update on the spray foam business? Has this business seen a similar disconnect in downstream demand versus your orders? And do you expect any sort of further pressure on this market just given homebuilders are under pressure at this point?

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Yes. The bottom line is, as you think about the spray foam business, that’s going to both be in new homes, which has slowed and home remodeling, putting taking out a second mortgage or whatever and at a higher interest rate and remodeling your home. That industry has obviously slowed as well. So yes, we would see that impact in both areas.

Phil Lister, Executive Vice President and CFO, Huntsman Corporation: And Patrick, you’ll have seen that we announced the closure of our Boisbury On Canada facility for spray. We’re consolidating everything down in Arlington in Texas, and that’s just rightsizing our footprint to ensure we’ve got the cost base right.

Conference Operator: Thank you. Our next question comes from the line of Jeff Zekauskas with JPMorgan. Please proceed with your question.

Jeff Zekauskas, Analyst, JPMorgan: Thanks very much. Can you talk about pricing in MDI in North America? It seemed that the major producers went out with meaningful price increases. What happened and what continues to happen?

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Well, look, we are still out there pushing price increases and so forth. I’m not going to speak on behalf of our competitors. I’ll let them speak for themselves and whatever decisions they’re trying to make. Jeff, the objective of our price increases was to expand margins. And if we can do that by maintaining a price and being able to take advantage of falling raw material prices, we’ll certainly do that.

I would say that I think that we are in a worse position today than we were two months ago when it comes to those prices being implemented due solely because of the lack of volume, the lack of demand that we’re seeing in the market. Conversely, I would expect that as you see tariffs fully in effect in North America, perhaps even in China, and as you see volumes recover to a more normalized area, you’ll see an opportunity for those price increases to be more meaningfully implemented across the board.

Jeff Zekauskas, Analyst, JPMorgan: Okay. And then for Phil. I think inventories went up $100,000,000 roughly sequentially. Is that mostly because your demand was less than you expected and you need to move your operating rates down? And do you have any estimates for whether working capital will be a benefit or a use this year?

Phil Lister, Executive Vice President and CFO, Huntsman Corporation: Yes, Jeff. It came in about where we expected. As a reminder, we’ve got a number of turnarounds around the world, particularly the large one that we had in Rotterdam where we had to build for that. We’ve got some more minor ones during the second quarter in Geismar and in Jing, China, as well as a turnaround at our Conroe, Texas facility. So I expected us to build.

Those numbers will come down in the second quarter. And you’re right, there’s some calibration there towards a lower or let’s call it an uncertain demand environment. But we’ll have our inventories back down at the end of the second quarter. For the full year, I think we articulated, we still expect to have an improvement on our cash conversion cycle. We improved on that last year and we’ll expect a further improvement on that for this year.

In terms of whether it be a source or a use, selfishly, hope there’s a use. I hope there’s a booming economy by the fourth quarter and fourth quarter activity is much higher in the fourth quarter this year versus the fourth quarter last year. But our focus honestly is on what we can control and ensuring our cash conversion cycle is appropriately managed.

Conference Operator: Thank you. Our next question comes from the line of Josh Spector with UBS. Please proceed with your question.

Josh Spector, Analyst, UBS: Hi, good morning. I wanted to ask two things. First, on the trade balances for MDI. I mean, at least on the data that we have through February, it looks like there’s been a tick up in Germany imports into The U. S.

So as China backs out, do you see a scenario where Europe fills in that gap or do U. S. Assets move up much more to fill that? I don’t know if that’s internal transfers of a competitor or something else going on or something with the market. And then second, just with your U.

S. Pricing where you have spread pass throughs or benzene pass throughs, how do those contracts renegotiate? What’s your ability to increase those spreads separate from the price increases? Thanks.

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Yes. On the first part of that question, yes, I would think that if somebody is bringing in product from Europe today, I can’t imagine why they would be doing that. I mean, as I look at our own manufacturing costs, we’re in excess of $100 a ton higher cost in Europe. And then on top of that, you have to pay what I think it’s a 6% to 8% duty or tariff. And then on top of that, you have to pay working capital, you have to pay transportation.

So you’re talking there probably of a 400 to $500 a ton difference between Europe and The U. S. So somebody is shipping product in from Europe into The U. S. For economic benefit.

I find that really tough to understand why somebody would be doing that. But short of an operating upset, you’ve got contractual obligations that you have to meet on a take or pay or something. So no, I do not see Europe backfilling Asian material that otherwise would be coming to The U. S. It just it has not been competitive to do that for at least the last three or four years.

And I don’t foresee in the future, given the energy costs and so forth in Europe, the freight costs and tariffs and so forth, I don’t see how that could possibly make sense on a longer term basis. Yes, on our pass through pricing, remind you that just under about 50% of our overall North American volume is on some form or another of pass through. So I think it’s kind of I’m not going to say it’s standard in the industry, but there’s some segments that have longer term commitments to customers and so forth where they favor that and others that do not. Typically, those contracts, I’m not going to speak to all of them because they all vary contract to contract. But typically, you have anywhere from a three, six months, what I would call a pit stop, where you can pull off in the contracts and you can readjust the portion of that contract that is not related to raw materials.

I would call that would be a margin expansion. Or you can just choose to get out of the contract altogether. But again, that’s going to vary customer to customer, term to term, but you typically every couple of months, you’ll have a pit stop. So again, if you see $1 drop in benzene that happened, let’s hypothetically say today, I would say that you probably have anywhere from a thirty to forty five day time period of where your existing inventory is going to have to be worked through the system. You’ve got benzene that’s if that price were to drop today, you’ve benzene that you bought yesterday, benzene that’s on the water in shipment to your plants.

You’ve got benzene in the form of nitro benzene, crude MDI, finished inventory. All that’s priced at that more expensive inventory. So the impact of that dollar cheaper benzene as of today is not going to be felt for some time. And then when it is, you’ll instantaneously feel it on that 50%. And again, that’s a much higher percentage than what you see in Europe or in Asia, in The U.

S. Market. That 50%, you would feel that instantaneously. And then the other 50%, you would see that probably over a 6% to a 3% to 6%, maybe in a very few contracts as much as long as a nine month sort of a term contract in that. So that last 50% would be tailing off there.

So again, I’d like to be able to say, you see a dollar drop today, you’re going to see the benefit today. Conversely, when prices go up, we’re not going to fully see the impact of that taking effect. And when prices go up, people are panicking and so forth. We usually it gives us that amount of time inversely to be able to respond to the markets and to be able to calibrate our production, our costs and so forth. So it works in the opposite when prices are going up.

Josh Spector, Analyst, UBS: Very helpful. Thanks, Peter.

Conference Operator: Thank you. Our next question comes from the line of Alexia Yefremov with KeyBanc Capital Markets. Please proceed with your question.

Alexia Yefremov, Analyst, KeyBanc Capital Markets: Thanks. Good morning, everyone. Peter, to continue with this line of questioning, can Chinese exporters shift to moving MDI to Canada and Mexico? And would your customers be able to shift their consumption to those two countries?

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Well, not if they become the fifty first and fifty second state, Alexia. Okay, I’m just kidding. No, that’s look, there’s obviously going to be there would be an advantage, I assume. Each of those countries have their own independent trade tariffs and so forth that are going to be put into place. There have been some recent, rather public MDI consumers that have taken MDI finished product, in the form of building materials and other products.

I don’t want to get customer or company specific that have brought that over the border and have been fined and under investigation for trying to avert duties that way. So again, when you look at what you produce in Canada, you’re going to have to be consuming that in Canada as well. If you bring a finished product into The United States, I’m not going count every single application, but on most of the applications, you’re going to have to be paying a duty on that proportion of MDI.

Alexia Yefremov, Analyst, KeyBanc Capital Markets: Makes sense. Thanks for this. And I wanted to ask you about the dividend. Could you share anything about how the Board thinks on this topic? Is the dividend something you really determined to keep at this level?

Or is there a good argument to sort of derisk the balance sheet and adjust it since free cash flow has been weaker for a while?

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: I think if you look in the past in our company’s past all through COVID and even through the economic recession going back fifteen years ago, the dividend has been something that this company has always held to be something very close to sacred. We as a management team, I mean, we look beyond just the cash generation of the company itself, we look at the $75,000,000 we’ve collected so far to date from Praxair legal settlement, from our SLIC dividend, from other initiatives that we’ll have between now and the end of the year, we feel very confident that we will continue to generate the amount of cash necessary, that we have a strong balance sheet, and we have certainly have confidence in the future as to where the company is going to maintain the dividend. So at this time, that certainly is not a question that we’re grappling with.

Phil Lister, Executive Vice President and CFO, Huntsman Corporation: Yes. I mean, we recognize yields are high right now. Alexey, they always are in trough conditions. As Peter indicates, we’ve got $1,300,000,000 of liquidity. Our debt maturities are 29,000,000,031 and 34,000,000,000 So we’re managing the cash side appropriately.

Conference Operator: Thank you. Our next question comes from the line of Mike Harrison with Seaport Research Partners. Please proceed with your question.

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Hi, good morning. Peter, along with all the tariff related uncertainty, you guys had a turnaround going on at Rotterdam that I think bled into the second quarter too. The unplanned outage at the Malek facility in Germany, it sounds like there was a fire at an automotive customer facility. Can you quantify the impact of those disruptions to EBITDA in Q1? And then Phil mentioned some more planned turnarounds for Q2.

How much headwind is baked into the EBITDA guidance from those planned, I guess, disruptions or turnarounds? I would say, Rod or Dan, as we’ve guided, I think on our previous call, we talked about a $15,000,000 hit in the first half, kind of $5,000,000 in the first quarter, dollars ’10 million in the second quarter. I think we continue to stand by that, though. We are literally in the course of the next few days here, we are literally going through a start up of our lines as we speak. And equally as important as our lines, the lines of our customers and suppliers who are also starting up their facilities.

Rotterdam is a particularly tricky one because we can only run as far and as fast as our customers do on this whole thing. As far as the fire is concerned, yes, that’s probably around a $3,000,000 hit. Again, we don’t have anything to do with the fire, but it did impact some of the order flows coming from our advanced materials going into, I think, particularly into the EV applications.

Phil Lister, Executive Vice President and CFO, Huntsman Corporation: Yes. And on maleic, think you’re aware, Mike, that the margins are incredibly thin in European maleic given the demand that we see there and given imports into China. So that’s a negligible impact. It does have a large impact when you look at sort of year on year growth numbers where it looks quite dramatic that PP was down 16%, but once you strip out the Malay European side of the business, it was down more like 3% to 4% overall.

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Yes. Virtually all that was European on a single site, yes. All right. And then the Geismar in China, and I think you mentioned another facility for Q2. Are those pretty modest in terms of impact for Q2?

Phil Lister, Executive Vice President and CFO, Huntsman Corporation: Yes, relatively small, Mike. You should focus on the Rotterdam and the Rotterdam impact for us.

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Yes, the impact on the others will largely be around the movement in stock and inventory, Phil already addressed.

Conference Operator: Thank you. Our next question comes from the line of Michael Sison with Wells Fargo. Please proceed with your question.

Michael Sison, Analyst, Wells Fargo: Hey, good morning. Peter, some of the consultants see a pretty good increase in MDI margins sequentially in 2Q versus 1Q driven by pricing. What are your thoughts in terms of industry profitability heading into 2Q?

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Well, again, I take a snapshot of today, as I said earlier in my comments, it’s around volume. Again, as I look at pricing, Europe where prices is kind of matching raw materials. As I look at The U. S, I think that we have an opportunity to expand margin if we’re able to maintain our price or slightly increase our price, hopefully get it up even further, and take advantage of falling raw material prices. Asia, again, I’ve talked about the falloff that we saw going into the second quarter.

It’s been a whopping eight days now that we’ve celebrated the price has either not been falling or gradually been coming up. So I’ll continue to take that one day at a time, but I want to emphasize that we’re eight days into either a dead cat bounce or sorry, I might just have send a bunch of cat lovers out dead cat bounce or it might be something that the product that was destined for North America that was being put on ships early in the first quarter, It was taken off ships and put back into the Chinese market. That product has been adequately absorbed into the Chinese market, and the Chinese markets are now better balanced. So we kind of look at a price going from $18,500 per ton down to about $14,002 today sitting like $15,200 Again, that’s a lot of volatility, but that prices to where we were a month ago or so has been pretty stable for the last couple of months, and has been fairly healthy given where we are in the other parts of the world. So I think Asia continues to be it’ll be interesting to see what happens here over the next couple of on pricing.

Michael Sison, Analyst, Wells Fargo: Got it. And then I understand that it’s difficult to take a look beyond 2Q, but what do you think you need to see or want to see to have a better second half in terms of earnings versus the first half? And if The U. S. Economy goes into a recession, albeit it seems like we’ve been in a chemical recession for quite some time, What happens?

What do you think you need to do to keep earnings at these levels?

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Well, certainly would like to see earnings improve materially from these levels. And again, as we look at the single biggest variable in the second quarter, as we kind of look at around where we had hoped second quarter would be versus where we see second quarter today, the biggest single variable that we see is around volume and pricing. And that’s going to be, in my opinion, not 100%, but largely a function of certainty. If you see certainty in the market and if people have an idea as to where tariffs are going and where supply chains are moving, and that entire impact, you’ll see volumes recover. And I believe that as you start seeing more and more trade deals get completed, that certainty slowly recovers back into the market.

I hope that by the end of the quarter that we’ll be surprised at the improvement volume. But that volume does have to improve. And I believe that it will eventually improve, just simply because there’s a massive disconnect, as I’ve said, between what consumers, what people are using, what they’re buying, what they’re spending on and what we’re supplying into those markets. There’s just not that much excess inventory in the system.

Conference Operator: Thank you. Our next question comes from the line of Arun Viswanathan with RBC Capital Markets. Please proceed with your question.

Ivan Mancusa, Vice President of Investor Relations and Corporate Development, Huntsman Corporation0: Great. Thanks for taking my question. Hope you guys are doing well. I guess I had a question about the guidance. It looks like your first half now is will be coming in around 150,000,000 or in that range.

And if you were to annualize it and add in some seasonality, you get to like a $350,000,000 range, which is I think quite a bit below what we started the year expecting. So obviously, Peter, you went through a lot of the potential pullback amongst your customers and then the potential positive bullwhip effect that can follow that. But am I thinking about your level of confidence in EBITDA for the year in the right way? I just don’t want to get ahead of our skis here just given all that uncertainty out there. Thanks.

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Yes. Personally, Arun, yes, we’re doing very well. Thank you for your comments. Personally, I would hope that we certainly finish the second half of the year better than the first half of the year. I think that the guidance that we gave in the first quarter call, we purposely avoided giving yearly direction just because it was so hazy then.

And I think it is far hazier today than it was then. I hate to say that given the fact that we’re three months further into the year. So I mean, I have lot of hope for the second half, but I can’t sit here and say that we’ve seen a bunch of orders that are going to give us a great deal of confidence. So I probably would just avoid trying to tell you where we’re going to end the year. My personal I think it’s true.

I think inventories are low. I think demand backlog on demand and housing and a lot of the products we produce, the build out of aerospace and the recovery of it, the build out of our electrical grid, the components and so forth going into that, the expansion that we’re going to continue to see in technologies and EVs and so forth, these all would tell you that there’s going to be a growth in demand and there’s going to

Conference Operator: be a

Ivan Mancusa, Vice President of Investor Relations and Corporate Development, Huntsman Corporation1: Hey, operator, any more questions?

Conference Operator: I’m sorry. Our next question comes from the line of John Roberts with Mizuho Securities. Please proceed with your question.

Phil Lister, Executive Vice President and CFO, Huntsman Corporation: Thanks, Peter. Are you seeing uniform weakness across composite wood versus automotive versus insulation? Or is there some differentiation there? And then secondly, during 2020, a lot of the small spray foam customers got stimulus at least to keep them going. Do you think they survive this kind of correction right now?

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Yes. I’ve got no idea as to what our competition will be doing in spray foam. I’ve not heard nor seen any talk legislation or anything around any sort of stimulus that would be directed towards a particular segment of any of our customer basis. So I kind of be surprised to see that. Yes.

And as we look at the difference between OSB, insulation, automotive, I think that there’s just a general trend right now of uncertainty. And that uncertainty right now just has people bringing down inventories, bringing down orders on the short term, preserving capital, strengthening their balance sheet, doing those kind of emergency steps that you see in moments in times of uncertainty until there’s greater certainty. So I’m not sure that it’s all necessarily tied industry to industry as much as it is just the general sentiment of the industry.

Phil Lister, Executive Vice President and CFO, Huntsman Corporation: Thank you.

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Thank you.

Conference Operator: Thank you. Our next question comes from the line of Frank Mitsch with Fermium Research. Please proceed with your question.

Ivan Mancusa, Vice President of Investor Relations and Corporate Development, Huntsman Corporation2: Good morning and thanks. Congrats to Tony Hankins on his pending retirement. It was a pleasure to work with him. And by the way, I’m not sure if it was just me, but in the last five minutes or so, conference call has been coming in and out, perhaps it was just my phone. But Peter, I appreciate the reference to COVID in terms of the paralysis that we’re seeing now.

But I took a look back at COVID and really it was just one quarter, was the second quarter of twenty twenty that was very poor. The first quarter and third quarter of twenty twenty, you posted very strong results. And here we are, it looks like the second quarter is the third quarter of really poor results. I mean, is this systematic or you believe that is episodic and that we’re going to get out

Ivan Mancusa, Vice President of Investor Relations and Corporate Development, Huntsman Corporation3: of it and you’re going

Ivan Mancusa, Vice President of Investor Relations and Corporate Development, Huntsman Corporation2: to go back to posting kind of $200,000,000 type EBITDA quarters. What gives you confidence that this is not a systemic decline in your business lines?

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: What gives me confidence is the disconnect between if our sales were down to automotive, we were down 10% and their sales were down 10 and the whole value chain was going down 10%, I’d say this is systematic. I’d say this is probably longer term and we ought to be getting ready for it. I’m simply not seeing that. And as I talk to customers and I talk to Board members and I talk to people that are involved in the auto into the aerospace and even into the homebuilders, I don’t get that indication. Frank, am I going sit here and say that I’ve talked to everybody and I can roughly accurately reflect everybody’s sentiment in this.

But I do believe that I’ve only seen this sort of disconnect between the panic in orders that we’ve seen today and that which we’ve seen previously. I would also just note that COVID we kind of saw lumpiness of the impact of COVID. There’s no doubt North America was certainly a second quarter phenomenon. I think it happened a little bit later than that in Europe, the impact on the European P and L and it happened previous to that on the Chinese P and L. And the Chinese P and L also spilled again kind of a second time in the latter part of 2020.

So I don’t want get too technical to the comparisons between COVID and where we are today. I will just say the only comparison that I was trying to make was more just around the couple of months that we saw a disconnect between, inventories, customer demand and pull through of the ultimate supply chains.

Ivan Mancusa, Vice President of Investor Relations and Corporate Development, Huntsman Corporation2: Okay, understood. And can you provide an update on the Malay facility in Europe? It seems like a couple of things happened there. One, you’re looking to make a decision on it, I think, by midyear, but then you also had an unplanned outage. What’s going on there?

What’s the how should we think about that?

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Well, I would think about that we think that by the middle part of this year that we will be in a position to announce a permanent decision as it pertains to that asset. And Europe continues to be flooded with maleic coming in from China and coming in indirectly from Russia via Turkey. And it also continues to be flooded not just with maleic, but also downstream UPR materials as well. So it’s kind of getting hit in multiple areas. And so in addition to our operating issues that we have in Germany, certainly are seeing headwinds in just the overall demand in the margin erosion that we see in Malayic in Europe.

Conference Operator: Thank you. Our next question comes from the line of Salvador Tiano with Bank of America. Please proceed with your question.

Ivan Mancusa, Vice President of Investor Relations and Corporate Development, Huntsman Corporation4: Yes. Thank you. Good morning. So firstly, on MDI, I wanted to ask, how are you so far in Q1 or in Q2 managing your MDI system, your upstream MDI plans given the reduced demand and specifically on Geismar, I remember a little bit over a year ago you brought online or you restarted the smaller of the units there. So is this something that you may have to stop using again or you stop producing in Q1?

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: No. I would say that if anything, we’re hoping to see greater capacity utilization. We brought Line one down in Q1 in part because obviously of low margins and in part because we believe that there was a lot of uncompetitive material being imported into The United States and that was having into the Americas market and that was having an impact on it. So with tariffs that are in place, with the change of imports and so forth that we’re seeing, if anything, I see that demand ought to be picking up for domestically produced MDI. Our downstream system houses in The U.

S, I’d remind you that we don’t have too many in The U. S. We produce polyols and that’s a raw material that’s going into our spray foam and our other polyols business. That continues to be a great business for us. We’re consolidating.

I would say that our HBS business is it’s a separate business. We look at internally, but we try to run it as competitively as we can integrate with the rest of our business. In some regards, I look at that as a downstream systems business as well. And we’re obviously consolidating that operation, making sure that our costs are aligned with the market realities. In Europe, we’ve continued to we’ve announced the closure of our Daggendorf, Germany and the reduction of some of our other sites and facilities around Europe.

We’ll continue to look at our overall footprint there. So yes, we’ll continue to look at our costs. We’ll continue to look at the overall structural demand and profitability of our entire chain. But this year, think that even if we remain in somewhat sluggish economic environment, that the opportunity to increase domestically produced MDI in North America will likely improve through the year.

Ivan Mancusa, Vice President of Investor Relations and Corporate Development, Huntsman Corporation4: Great. Perfect. And I want to follow-up on the PO and PB JV in China. And if you can give a little bit more outlook now, on what you expect for perhaps the next few quarters? And if there’s any more clarity, I guess, on what would be the dividend you receive on 2026 based on what is happening right now in earnings?

Phil Lister, Executive Vice President and CFO, Huntsman Corporation: Yes. So I mean, as we said, our equity dividends for $25,000,000 will be a lot lower than they were in 24,000,000 MTBE margins started to decline towards the back end of last year, and you can follow those margins via CMA, via ISIS. They’re close to breakeven today as oil has come off. WTI is now below 60%. Brent is down at about 60%.

So they’re close to breakeven right now, and that’s why we’ve guided to where we have in the second quarter. And that second quarter ex fee income will be about $20,000,000 below where we were in the second quarter of last year. So there’s a large bridge there just on the ex fee income side. How that plays out for the remainder of the year, I think, will be dictated by economic activity, certainty around tariffs, where oil heads overall. MTB has had a long history of being low margin and then being able to turn around to higher margin.

So we’re not in a position today to guide how our dividends are going to look in ’26 over ’25. That’s an extremely volatile product in market.

Conference Operator: Thank you. Our next question comes from the line of Matthew Blair with TPH. Please proceed with your question.

Ivan Mancusa, Vice President of Investor Relations and Corporate Development, Huntsman Corporation1: Thank you and good morning, Peter. Could I ask a question on the debt picture here? So you took care of some notes in the first quarter. I think you stand around four times net levered on LTM basis. If we look at that more on an annualized first half basis, you’re around 5.5 times net leverage.

Do you need to reduce debt or are you still comfortable at where you’re at?

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Well, I’m certainly not comfortable with the margins that are being earned in the business. They ought to be higher, and I believe that they will be getting higher. And I think we’re taking a snapshot of time as to where our debt levels are at what I would think right now would be a certainly a low as we leave the first quarter going into the second quarter and would hope for some improvement there. But no, I think as we look at our longer term debt levels on a normalized EBITDA basis, we continue to be in a position where I believe we have a very strong balance sheet.

Phil Lister, Executive Vice President and CFO, Huntsman Corporation: Yes. If you look, we’ve got bond maturities 29, 30 one and 34. Dollars one point five billion of net debt for this portfolio and over a cycle is a good number to be at. We’re obviously at trough economics now, well aware of that. Our liquidity, as I’ve said, is $1,300,000,000 is also ample, and we’ll do all the relevant things that you’d expect to adequately protect the balance sheet.

That longer maturity profile that we have on bonds is helpful.

Ivan Mancusa, Vice President of Investor Relations and Corporate Development, Huntsman Corporation1: Sounds good. And then I think the prepared comments mentioned that your construction volumes of your overall business were down 6% quarter over quarter in Q1, which seems like an unusual counter seasonal move. Was that weakness coming more from commercial or more from the residential side?

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: I believe that was mostly from the residential side of the business. And I would think that a lot of that, again, had to do more with the buying patterns rather than the demand patterns on the construction side.

Phil Lister, Executive Vice President and CFO, Huntsman Corporation: Yes. Normally, do actually expect a slight decline when you move from Q4 to Q1. We look at it relatively simply. In Q4, you have December as a low month, whereas in quarter one, you have January and February as low months, particularly with Chinese New Year. So that’s the way to kind of think about that sequential movement when it comes to construction globally.

Conference Operator: Thank you. Our next question comes from the line of David Begleiter with Deutsche Bank. Please proceed with your question. Hi, good morning. This is Emily Flusko on for Dave Begleiter.

You announced the doubling of your cost savings to 100,000,000 Do you have any sort of early preview of where these savings will be coming from?

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Well, very good question. We’ll be giving more details about this. I don’t like announcing cost savings until we literally have it down to exact numbers and details and so forth. We feel very confident that we’re heading there. Exactly where that is will be located and so forth.

I think I gave some indications about having to calibrate our cost structure to the market realities, particularly in Europe. But I think we’ll be giving more light, more color on that as the quarter progresses.

Conference Operator: Got it. Thank you. Thank you. Our next question comes from the line of Hassan Ahmed with Alembic Global. Please proceed with your question.

Ivan Mancusa, Vice President of Investor Relations and Corporate Development, Huntsman Corporation3: Good morning, Peter and Phil. Apologies if someone’s asked this question previously, my line was cutting in and out. Just wanted to revisit some of the commentary around MDI, specifically you talked about 20 to 25% of U. S. MDI demand being met via exports from China.

I mean, I completely understand that it’s highly unpredictable what the future of these tariffs will be. But I mean, when I sit there and think about the impact of tariffs and above and beyond that, more specifically for MDI, the whole anti dumping investigation that’s going on, I think it’s obviously fair to assume that that Chinese product in a tariff world and an anti dumping world, there will be duties on that product. So am I missing something, because it just seems beyond some of these very near term trends of loading up on sort of Chinese exports into The U. S. Market and sort of the issues caused by that in the near term.

I mean beyond the near term, the setup actually seems highly favorable if you’re producing product in The U. S. Am I thinking about this the right way?

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Hassan, well, very good question. Thank you very much. I think that you are. So a couple of things. I don’t want to go down a rabbit hole here, but I want to make sure that we kind of clarify what’s long term and kind of what’s short term.

First of all, when we talk about a 20% to 25% supply going to the market, that’s for The Americas. That’s for North, South, United States, it’s for The Americas, right? When you talk about The United States, that number would even be higher than that 20%. So when you think about tariffs and where they are, think about where we were at the beginning of the year, which was what I would call the three zero one tariffs. These were tariffs that were put in place in the first Trump administration.

They were maintained through the Biden administration. Reason I bring that up is I would consider these to be longer term tariffs. These are about 31.5% tariffs that were in place. In addition to that, I’ll then put kind of a second bucket of what I would call the Trump tariffs. Those are the tariffs that were put in place over the course of the last thirty to sixty days.

Now I may be a little bit off on these tariffs because they seemingly have changed back and forth a little bit, but those today are around 145%. The reason I put those in the second bucket is, they came rather suddenly and all of a sudden you might see Xi Jinping and Trump emerged from a trade summit or something like that and say they’re gone. I’m not expecting that to happen. But again, they came suddenly, they can leave just as suddenly. And so I would say that’s a Trump tariffs around 145% added to the 31%, it gets you just over the 175.

There’s also an antidumping case. It’s quite separate and apart from what I would call the Trump tariffs. And this is around the ITC in the Commerce Department. And as I think about those cases on in March of this year, the ITC ruled that there was a reasonable indication that there’s been an impact on domestic industry supply balances profitably, so on and so forth from Chinese imports. The Commerce Department is now conducting a preliminary investigation, and that’s supposed to be done by around the September.

Assuming that they rule favorably in that investigation, that will then go to a commerce and ITC, the International Trade Commission. We’ll conduct a final investigation to determine the dumping the amount. That will probably be adjudicated sometime final decision sometime around February with a final ruling put into place at March of next year. That could be anywhere from 300 to 500%. The reason I put that in the third bucket is that’s quite apart from any sentiment that the President may or may not have or any negotiations that he has with somebody.

That’s an ITC and the Commerce Department ruling. And if that’s put into effect, those go for a period of five years before they are revisited. So you kind of have again the pre Trump tariffs 31%, the Trump arbitrary, I won’t say arbitrary, I’m sure a lot of logic and thought went into it. The Trump arbitrary tariffs, and of 145% that I would say could come or go. And then there’s this antidumping case.

It could be anywhere from 300 to 500%. And again, that could be put into place and could be put into place on a long term basis, for multiple years. So yes, I think that to answer your question, I’m not going to sit here and say that I claim to know the impact of all that because it’s all happening as we speak. But I think you’d have to be pretty naive to think that if those were all implemented or if any two of those three were implemented, that, that would not have an impact on the North American marketplace. And I think that my comments earlier about having to shut down part of our production, when you reopen that production, demand comes back, you’re hiring more people, you’re hiring you’re spending more domestically, you’re producing more domestically, you’re paying higher taxes domestically, and you see the impact of that.

So yes, that is all playing out in real time, Hassan, and I greatly apologize for a long winded answer.

Ivan Mancusa, Vice President of Investor Relations and Corporate Development, Huntsman Corporation3: No worries at all. And as a quick follow-up, obviously, uncertainty in I mean if I were a Chinese polyurethane producer facing these headwinds I guess, I would probably be thinking about maybe some rationalization. And adding to those woes, I mean, course, China sort of imports around 40% to 50% of their LPG needs, propane in particular from The U. S, right? And obviously, on the surface, it seems that those are going to be tariffed as well.

And if you take a look at the last couple of years, China’s more than doubled its PDH capacity, right. So all of a sudden in that tariff world, I’d like to think that maybe there’ll be some shuttering of those PDH units, because they’ll become highly uneconomic, right, which in theory will impact propylene supply, and which in theory could impact PO and polyurethane economics. So I mean, again, is that the right way of thinking about it? And are you seeing any indications of rationalization on the back of all of these headwinds?

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Yes. It’s an excellent point, Huzan, and very well thought through. I think that as you look at these, they’re each going to be treated differently. I look at NGLs that are being imported into China from The U. S.

And to what degree those are tariff coming or going into China. I noticed this last week that China dropped its tariff on ethane, a vital raw material for gas cracking into ethylene and polyethylene. So yes, you’re already starting to see backwards movement in certain areas and certain products that are being freed up, if you will. But there will be a great deal of, I think, change coming in the next quarter or two. I don’t think it’s going to play out in the next couple of years.

I think it’s going play out in the next quarter or two. And what exactly international producers decide to do is purely up in the air.

Conference Operator: You.

Peter Huntsman, Chairman, CEO and President, Huntsman Corporation: Operator, I think we have any more questions, we’ll take that. But I know we’re beyond the top of the hour and I think it’s pretty crowded day with calls right now.

Conference Operator: Have no other questions at this time. So at this point, I’ll conclude our Q and A session and our call. We thank you for your interest and your participation. You may now disconnect your lines.

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