Trinseo loses nearly $431 million in 2022 despite sales boost

Materials maker Trinseo posted a major financial loss in 2022, even as sales showed a small gain.

For the year, Trinseo lost almost $431 million after showing a profit of $440 million in 2021. The firm's sales were up almost 3 percent to almost $4.97 billion.

Officials with Trinseo in Wayne, Pa., had warned investors of the substantial loss in late January. Previously, the firm had expected a loss of no more than $126 million for the year.

Most of the increased loss came from the fourth quarter, when Trinseo lost $365 million. That loss includes a pre-tax, non-cash goodwill impairment charge of $297 million related to the firm's PMMA (acrylic) and Aristech Surfaces reporting units. The impairment charges were attributed to "a challenging macroeconomic environment, including significantly lower demand for building and construction and wellness applications."

In a Feb. 8 news release, President and CEO Frank Bozich said that Trinseo's fourth-quarter results "improved sequentially as we made proactive operating decisions that will continue to reduce our exposure to cyclical commodity markets."

For the year, sales in Trinseo's Engineered Materials unit—including acrylic resin and sheet—were up 38 percent to almost $1.05 billion, but its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) dropped 24 percent to less than $72 million. The firm's Base Plastics unit, including polycarbonate and ABS, saw 2022 sales decline almost 12 percent to $1.32 billion, with adjusted EBITDA plunging 71 percent to $91 million.

Trinseo's Polystyrene unit—not including its Americas Styrenics joint venture—saw sales for 2022 drop 2 percent to $1.09 billion, with adjusted EBITDA down 45 percent to $99 million. Adjuted EBITDA for Americas Styrenics, one of North America's largest PS resin makers, was up almost 11 percent to $102 million.

Looking to 2023, Bozich said that Trinseo "is expecting underlying demand to remain challenged … but we are increasingly confident that we will see the end of destocking early in the year."

"We anticipate first quarter sales volumes will be seasonally stronger than fourth quarter with continued improvement through the year as demand in China recovers and energy prices in Europe moderate, which will hinder significant import opportunities from Asia," he added.

Bozich also said that during 2023, Trinseo "will look to make further progress on our growth platforms, including material substitution applications as well as products containing recycled or biobased materials."

Trinseo had already announced several cost-cutting moves in December, including closing a styrene monomer plant in Germany and an acrylic sheet plant in Mexico. The firm's styrene plant in Böhlen, Germany, will be closed because of "an uncompetitive position in the global styrene market due to the site's subscale size, industry capacity additions and elevated natural gas prices in Europe."

Trinseo's acrylic sheet plant in Matamoros, Mexico, will also close, with production moved to a continuous sheet plant operated by the firm's Aristech Surfaces unit in Florence, Ky. Trinseo also is closing a polycarbonate resin line in Germany and reducing styrene butadiene latex production in Finland.

During 2022, Trinseo attempted to sell its styrenics business, but ended those efforts in July because of unfavorable economic conditions.

On Wall Street, Trinseo's per-share stock price began 2023 at $23.50 but opened for trading on Feb. 15 at $25.88, for a gain of more than 8 percent.