Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you discuss the main positives in operating income this quarter despite various small issues?
A: (Luis Rojo - CFO, Vice President) Despite flat overall volumes in surfactants and significant negative mix from agriculture, the main driver of adjusted EBITDA growth was margin improvement. Excluding one-time expenses from disruptions at Millsdale, adjusted EBITDA was actually up double digits, which is a testament to our margin improvement.
Q: What opportunities are there to address recurring issues at the Millsdale plant, such as power disruptions and wastewater problems?
A: (Scott Behrens - President, CEO, Director) We have a long-term infrastructure reinvestment plan for Millsdale and are working to improve the quality and reliability of power with external providers. The recent wastewater treatment plant issue was unexpected, but we are managing it and expect to rectify it in the second quarter.
Q: How are polyol volumes tracking in relation to customer demand, especially given the disruptions this quarter?
A: (Scott Behrens - President, CEO, Director) Our polyol volume recovery is on track, and there seems to be a lot of pent-up demand for reroofing projects. We anticipate our numbers will more closely align with customer growth expectations as we resolve operational issues.
Q: Can you quantify the impact of the Millsdale outage in Q1 and how it affected the polymers and surfactant segments?
A: (Luis Rojo - CFO, Vice President) The Millsdale outage had a $5.8 million impact, split roughly evenly between the polymers and surfactants segments. We expect similar expenses in Q2 due to ongoing issues.
Q: When do you expect the price mix headwinds, particularly the 18% decline, to stabilize, and how will the agricultural sector's recovery affect this?
A: (Luis Rojo - CFO, Vice President) The majority of the 18% decline was due to pricing, with agriculture being a significant negative mix impact. We expect margins to improve as raw material prices decrease and as the agricultural sector begins to recover in the second half of the year.
Q: What is the current customer environment in Latin America, and can we expect pricing improvements following volume recoveries?
A: (Scott Behrens - President, CEO, Director) Our priority in Latin America has been to recover volumes and market share. While we hope pricing will improve over time, our current focus remains on reestablishing our presence and defending market share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
