Yahoo Finance Huntsman Corporation (NYSE:HUN) Q1 2024 Earnings Call Transcript
Huntsman Corporation (NYSE:HUN) Q1 2024 Earnings Call Transcript May 3, 2024
Huntsman Corporation isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Greetings, and welcome to the Huntsman Corporation First Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. The question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Ivan Marcuse, VP of IR and Corporate Development. Thank you. You may begin.
Ivan Marcuse: Thanks, Daryl. Good morning, everyone. Welcome to Huntsman's first quarter 2024 earnings call. Joining us on the call today are Peter Huntsman, Chairman, CEO, and President; and Phil Lister, Executive Vice President and CFO. Yesterday, May 2, 2024, after the US markets closed, we released our earnings for the first quarter '24 via press release and posted to our website, huntsman.com. We also posted a set of slides and detailed commentary discussing the first quarter 2024 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 this call, let me remind you that we may make statements about projections or expectations for the future.
All such statements are forward-looking statements and 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, huntsman.com. I'll now turn the call over to Peter Huntsman, our Chairman and CEO.
Peter Huntsman: Ivan, thank you very much, and thank you all for taking the time to join us this morning. Reviewing the results of the first quarter, a few things of note are emerging. I said in our fourth quarter conference call on the 22 of February that our number one priority this year was to recover lost volumes. During the first quarter, we were able to make some modest gains and we'll be doing more throughout 2024. The gains that we saw in volume were attributed to a combination of new business, demand growth and pockets of inventory restocking. We question how much of this was the end of inventory destocking and the beginning of inventory rebuilding versus demand growth. While it will vary customer by customer, I believe it to be about 50-50.
I should also say that eventually the two conditions merge into one gray area; demand improvement begets inventory restocking. However, the bigger issue is when do markets recover sufficient to achieve pricing recovery? Today's levels of profitability, particularly in Europe, are below reinvestment levels, in some cases, are still below positive cash generation. While I'm happy to see 25% growth in our North American MDI demand in Q1, we should remember that this is compared to Q1 of 2023, where demand had dropped 35% from 2022. All this noise means that we are moving back to where we were nearly a year ago. To have a real return to normalized market conditions, we're going to need consistent demand improvement and equally important, higher prices to expand margins.
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To continue reading the Q&A session, please click here.
