Trinseo, a provider of specialty material solutions, has announced its financial results for the second quarter of 2024. Net sales totaled $920 million, reflecting a 4% decrease compared to the previous year. This decline was due to lower sales volumes in Polystyrene, Plastics Solutions, and Latex Binders, partially offset by higher sales in Engineered Materials. A 1% increase in sales was driven by higher prices.
The company reported a net loss of $68 million for the quarter, an improvement of $281 million from the previous year, which was adversely impacted by a $349 million non-cash impairment charge. The current quarter also included a $13.5 million non-cash after-tax charge related to an increase in the valuation allowance on deferred tax assets in China. Adjusted EBITDA was $67 million, reflecting a $10 million increase from the prior year despite a $10 million unfavorable impact from net timing. All business segments, except Plastics Solutions, saw increases in adjusted EBITDA.
Frank Bozich, President and CEO of Trinseo, commented, “Our second-quarter performance matched expectations, achieving our highest Adjusted EBITDA since the first half of 2022, despite challenges from unfavorable net timing. Engineered Materials saw significant momentum due to moderating input costs, stabilized MMA market dynamics, and steady demand for PMMA applications, resulting in record sales volumes and Adjusted EBITDA. We are encouraged by the positive outcomes of our restructuring efforts and their impact on our financial results.”
Second Quarter Performance by Business Segment:
- Engineered Materials: Net sales were $230 million, a 12% increase from the previous year. This rise was driven by a 17% increase in sales volumes of MMA and formulated products for automotive, consumer electronics, and lighting applications, partially offset by a 5% decrease in price. Adjusted EBITDA reached $25 million, up $13 million due to higher volumes and improved margins.
- Latex Binders: Net sales totaled $252 million, a 1% decrease. This was influenced by a 5% drop in volumes, primarily in European paper and carpet applications, partly countered by a 4% increase in prices due to higher raw material costs. Adjusted EBITDA was $26 million, an increase of $3 million, driven by improved regional and product mix and higher plant utilization. Sales to CASE applications represented a record 12% of total segment volumes, up 8% year-over-year.
- Plastics Solutions: Net sales were $263 million, down 7% from the prior year. This decrease was attributed to a 5% drop in sales volume due to a planned polycarbonate turnaround and a 1% decline in prices. Adjusted EBITDA was $16 million, $8 million lower than the previous year due to reduced polycarbonate volumes and unfavorable timing variances from decreasing styrene costs.
- Polystyrene: Net sales were $175 million, down 21% from the previous year, with a 28% decrease in sales volume. This decline was due to the closure of the Terneuzen styrene production facility, a strategic reduction in low-margin sales, and customer destocking in a declining price environment. The decrease was partially offset by an 8% increase in prices. Adjusted EBITDA was $7 million, $5 million higher due to improved margins in Europe from falling raw material costs.
- Americas Styrenics: Adjusted EBITDA was $16 million, an increase of $3 million from the previous year, attributed to higher styrene margins.
Looking ahead, Trinseo continues to focus on leveraging its strengths across various segments while managing market dynamics and operational challenges.
