WAYNE, PA — Trinseo (NYSE: TSE) announced its financial results for the third quarter of 2024, reporting net sales of $868 million, a slight decline of 1% compared to the previous year. The decrease was primarily attributed to a strategic decision to reduce low-margin business in Polystyrene and Latex Binders, leading to an 8% drop in sales volume. However, this was partially offset by a 7% increase due to the pass-through of higher raw material costs.
The company recorded a net loss of $87 million, which included $26 million in pre-tax restructuring and other charges. Despite this, Trinseo’s Adjusted EBITDA rose to $66 million, $25 million higher than the previous year, demonstrating improved performance across most business segments. This uptick was bolstered by cost savings from prior restructuring efforts and reduced natural gas hedge losses.
Frank Bozich, President and CEO of Trinseo, commented on the quarter’s performance, saying, “As expected, market conditions and Adjusted EBITDA were sequentially similar to the prior quarter. Despite continued weak demand in many of our end markets, particularly building and construction and appliances, we saw significant year-over-year profitability improvement largely as a result of our restructuring actions and continued moderation of European input costs.”
Trinseo’s Engineered Materials segment saw a 12% increase in net sales, driven by higher sales volumes in consumer electronics and medical applications. The Latex Binders segment also experienced an 8% rise in net sales, benefiting from higher raw material costs and an improved product mix. Meanwhile, Plastics Solutions net sales increased by 3%, supported by higher raw material prices.
However, the Polystyrene segment faced challenges, with net sales dropping 28% due to reduced sales volumes following the closure of a production facility in the Netherlands. In contrast, Americas Styrenics reported an Adjusted EBITDA decline of $15 million, impacted by unplanned outages and lower margins.
Looking ahead, Trinseo anticipates a net loss ranging from $81 million to $71 million for the fourth quarter, with Adjusted EBITDA projected between $40 million and $50 million. Bozich noted that while seasonal factors might affect sequential performance, the company expects profitability improvements from ongoing restructuring efforts.
Bozich concluded, “While we are pleased to see a sustained higher level of profitability, low demand has persisted in many of our end markets and the timing of a broad market improvement is uncertain. Therefore, we made the difficult decision to take additional restructuring actions including the consolidation of business management and support-function roles, and the decision to exit virgin polycarbonate production at our facility in Stade.”
Trinseo stated that it remains focused on streamlining operations to navigate the challenging macroeconomic environment, aiming for a more efficient organizational structure to drive long-term success.
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