TRINSEO
Unprofitable German assets put styrenics group in the red in Q1 / Weaker styrene margins, lower prices and Covid-19 impacts
Trinseo (Berwyn, Pennsylvania / USA; www.trinseo.com) posted a first-quarter net loss of USD 36m (EUR 33m) from a year-earlier net profit of USD 36m, dragged down by an impairment charge for certain unprofitable German assets it is considering for disposal. As part of its long-term strategy, the US-based manufacturer of plastics, latex binders and synthetic rubber said it had started discussions with the German employee representatives regarding the “disposition“ of styrene assets in Böhlen and polybutadiene rubber (PBR) in Schkopau (see Plasteurope.com of 17.04.2020). A spokesperson told Plasteurope.com that currently the SM facility is still operating, and there is good demand for PS.

The company’s site in Böhlen / Germany (Photo: Trinseo)
First-quarter profitability at Trinseo was affected by weaker styrene margins, lower pricing, a planned turnaround at Americas Styrenics and an approximately USD 6m negative impact from the Covid-19 pandemic. The impact was mainly related to lower synthetic rubber demand in China. Adjusted EBITDA was USD 57m, down 44%. Sales shrank 16% to USD 854m on lower volumes and prices in the Polystyrene, Performance Plastics, Feedstocks and Synthetic Rubber segments.

There was improvement across all of its derivatives businesses, which were partially offset by lower SM margins and the planned turnaround at America Styrenics.

In terms of plastics-related segments, Performance Plastics sales of USD 305m fell 17% on lower sales volumes due to headwinds from automotive production shutdowns. Adjusted EBITDA was up 3.4% at USD 37m.

Polystyrene’s adjusted EBITDA slumped 30% to USD 12m on lower sales volumes which, together with dwindling prices, contributed to a 20% diminution in sales at USD 183m. There was strong demand for packaging applications, with lower volumes expected in appliances and insulation. Feedstocks sales plummeted 33% to USD 45m due mainly to lower styrene-related net sales. Adjusted EBITDA was a loss of USD 16m following weaker market conditions in Europe and Asia, compared with a profit of USD 17m in 2019.

Commenting on the outlook for the second quarter, CEO Frank Bozich said that there has been sustained demand for polystyrene and latex binders for food packaging, polycarbonate for isolation sheeting and engineered materials for medical applications. However, he expects a significant decline in demand in automotive, tyres and textiles in the second quarter.
12.05.2020 Plasteurope.com [245104-0]
Published on 12.05.2020
Trinseo: Millionenschwere Abschreibungen für SM-Anlage in BöhlenGerman version of this article...

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