New-look Trinseo expects a rebound

Berwyn, Pensylvania – Trinseo, formerly known as Styron, has published its fourth quarter and annual financial results for the year ending 31 Dec 2014, saying its revenue dropped compared to 2013.

Annual sales at the manufacturer of plastics, latex and rubber dropped 3 percent to $5,128 million, compared the year before. This was primarily due to the pass-through of lower raw material costs, said the 3 March statement.

Trinseo’s adjusted earnings (EBITDA) for the year decreased $16 million due to inventory revaluation in the fourth quarter – driven largely by declining oil prices and lower sales volumes, particularly in the styrenics segment.

Adjusted EBITDA excluding inventory revaluation increased $8 million versus the prior year, driven by improved performance in the synthetic rubber and engineered polymers sectors.

In the fourth quarter, Trinseo reported a year-on-year drop of 7 percent in synthetic rubber revenue – to the amount of $137 million. This, the company said, was due to the pass-through of lower raw material costs as well as currency factors.

“These impacts were partially offset by higher SSBR (solution styrene butadiene rubber) sales volume, which set a record high in the quarter, and was 21 percent higher than prior year,” Trinseo noted.

For the full year, SSBR sales volume was up 28 percent over 2013. Trinseo did not give a figure for SSBR sales or profit but said it continued to invest in new technologies and products to serve the fast-growing performance tire market.

Also, latex revenue of $286 million for the quarter decreased 7 percent compared to 2013.

Styrenics revenue of $452 million decreased 15 percent, mostly due to the pass through of lower raw material costs, while engineered polymers revenue dropped by 5 percent due to currency moves and lower sales volumes.

Despite the lacklustre performance, CEO Chris Pappas was happy with the performance: “I am proud of what we achieved during the year. Excluding inventory revaluation, adjusted EBITDA improved year-over-year despite lower styrene monomer margin of approximately $40 million.”

Looking at prospects for this year, Pappas expects Trinseo to benefit from a business alignment in January 2015: creating two new business divisions – Performance Materials and Basic Plastics & Feedstocks.”

“We expect very strong results in the first quarter excluding inventory revaluation driven by customer restocking and higher margins on lower costs,” said the CEO.

“For full year 2015, we expect healthy year-over-year EBITDA improvement driven by cyclical rebound of styrene monomer, structural and cyclical improvement in polycarbonate, and volume growth in synthetic rubber and performance plastics, which will more than offset headwinds from the weaker Euro,” Pappas concluded.