WAYNE, PA — Materials science company Trinseo (NYSE: TSE) has reported a net loss of $76 million for the first quarter of 2024, with a negative earnings per share (EPS) of $2.14. Despite these challenges, the company expressed optimism about reversing its fortunes, citing improvements in market conditions and strategic adjustments.
The company’s Adjusted EBITDA stood at $45 million, which includes a favorable impact from net timing adjustments. However, operational challenges persisted, with cash used in operations amounting to $66 million and capital expenditures of $16 million, resulting in a negative free cash flow of $82 million for the quarter. This figure was significantly impacted by a $61 million increase in trade working capital, attributed to seasonal factors and a steep rise in styrene monomer prices.
Ending the quarter with $171 million in cash, of which $5 million was restricted, Trinseo highlighted about $252 million in additional liquidity available through undrawn financing facilities. The company also made strategic moves to extend the maturity date of its Accounts Receivable Securitization Facility and expand its borrowing capacity.
A notable strategic decision announced was the initiation of the sale process for the company’s interest in Americas Styrenics and the potential closure of its virgin polycarbonate production site in Stade, Germany. These moves are aimed at enhancing profitability and streamlining operations.
Frank Bozich, President and CEO of Trinseo, commented on the first quarter’s performance, noting particular encouragement from the steady improvement over the period. “We believe destocking in some of our value chains has ended, as market tightness resulted in significant margin expansion in March, and we see this continuing into the second quarter,” Bozich said.
Looking ahead to the second quarter of 2024, Trinseo anticipates a net loss of $53 million to $38 million but expects an Adjusted EBITDA of $60 million to $75 million, forecasting positive momentum. “I am confident in a significant sequential profitability improvement,” Bozich added, citing the turnaround at Americas Styrenics and continued market tightness in styrene and MMA markets as supportive of higher margins.
Bozich further emphasized the company’s focus on liquidity preservation amidst the positive momentum, underscoring the importance of strategic financial management in navigating the complex materials science marketplace.
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