US plastics group Trinseo (Berwyn, Pennsylvania; www.trinseo.com) has lowered its 2023 forecast following a first-quarter net loss from continuing operations of USD 49 mn (EUR 44 mn), which compared to a profit of USD 17 mn in the first three months of 2022.

The company said it now expects 2023 net loss from continuing operations of USD 61-94 mn, a major shift from the previous forecast of a profit of USD 3 mn to USD 33 mn.

The projection for this year’s adjusted EBITDA was lowered to USD 275 mn to USD 325 mn versus the previous range of USD 375 mn to USD 425 mn. Trinseo attributed the reduction to natural gas hedge losses, lower sales volume, extended destocking, and an overall slower market recovery, all which were factors behind the lower results in the Q1.

Quarterly revenues contracted 28% to USD 996 mn, the company reported, with Europe taking in the biggest hit in sales volumes due to decreases in building and construction and durables, though partially offset by automotive.

Trinseo president and CEO Frank Bozich said, “Despite a similar demand environment from the fourth quarter, our operating results improved significantly due to lower costs as well as our asset restructuring actions. We generated positive free cash flow in this challenging environment as we implemented numerous liquidity improvement actions including working capital reductions.”

First-quarter results included a USD 19 mn unfavorable impact from natural gas hedging as well as a USD 10 mn impact from manufacturing cost under absorption, the company reported.

Trinseo said Q1 EBITDA plunged nearly 80% to USD 36 mn, driven by lower volume across all segments and a lower margin.

To improve its cash profile, Trinseo is selling its Matamoros, Mexico, PMMA manufacturing facility for USD 19 mn, deferring capital expenditures, and substantially further cutting dividends.

It is also refocusing on the sale of the Styrenics business, which will include marketing individual assets and regional operations.

Q1 sales at the Engineered Materials unit fell 30% on the year to USD 206 mn as customer destocking continued, with muted demand most acutely impacting consumer electronics, building and construction, and wellness. Adjusted EBITDA plunged 134% to a loss of USD 12 mn.

Revenue and adjusted EBITDA at the Latex Binders division dropped, 19% to USD 248 mn and 13.3% to USD 26 mn respectively. Results also shrank at Plastics Solutions, with sales off 27% to USD 290 mn and EBITDA down 62.3% to USD 26 mn, as margins in polycarbonate and ABS products fell under pressure.

Polystyrene sales skidded 34% to USD 209 mn, and adjusted EBITDA tumbled 64.4% to USD 16 mn, primarily from the pass-through of lower styrene costs and weaker demand in appliance and building and construction applications.

Adjusted EBITDA at Feedstocks plummeted 375%, while at Americas Styrenics, it dipped 18.2%, the company said.