No bad stock

Celanese Corporation
CEO : Ms. Lori J. Ryerkerk BS

Quarterly earnings growth(YoY,%)

Lori Ryerkerk says,

China’s Depressed Demand

• China has experienced a difficult year with depressed demand, similar to the rest of the world.
• Demand conditions, especially for the Acetyl Chain, seem tight despite lower demand.
• Unexpected outages in the second quarter and July resulted in a rapid price response, indicating minimal spare inventory or capacity.

Utilization and Price Movement

• Utilization for acetyls is around 90% globally and in China, suggesting a match between supply and demand.
• Although demand has not significantly recovered, there is enough demand to drive price movement as supply grows.

Stimulus Response

• There has been limited response to stimulus measures so far, despite expectations for a forthcoming response.

Strengths and Weaknesses in China

• Autos remain strong in China and the broader Asia area.
• Weaknesses include consumer electronics and consumer goods, impacted by the situation in Europe and limited exports.

Scott Richardson says,

Cash Management and Debt Reduction

• The company is focused on reducing its debt and has plans to utilize cash to pay off term loans and make interest payments.
• There is a $300 million interest payment due in the third quarter that will be covered using the cash on hand.
• Maturities coming up later in the year will also be handled using available cash.
• The company is in the process of moving cash from other geographies back to the US, with the goal of completing the transfer by the end of the year.
• The company expects to operate with a lower amount of cash, around $500 million, providing opportunities for deleveraging.

Q & A sessions,

Factors Expected to Impact Stock Movement

• The company anticipates an uplift in 2024 due to lower variable costs resulting from inventory drawdown in 2023.
• An additional $150 million of M&M synergies is expected next year, aided by SAP integration and cost reduction measures.
• The company expects to see a recovery in M&M volume, particularly in the Acetyl side, with an additional $100 million contribution from the Clear Lake asset.
• Lower interest expenses are anticipated in 2024 due to significant debt reduction in 2023.
• The fourth quarter is expected to be the company’s best quarter of the year, supported by additional cost control measures, M&M synergies, and strong performance in Asia and China.