Celanese Corporation (NYSE: CE) stock rose over 3.9% on 23rd July 2019 (as of 12:11 pm GMT-4; Source: Google finance).
CE Celanese delivered its performance, amid a backdrop of weak demand and accelerated destocking, by exercising its differentiated business models in the Acetyl Chain and Engineered Materials and demonstrating a stable Acetate Tow earnings profile. In the second quarter, the Company generated operating cash flow of $424 million and free cash flow of $356 million and returned $378 million to shareholders through $300 million in share repurchases and $78 million in dividends.
Moreover, during the second quarter, CE has announced the shutdown of acetate flake production at the Ocotlán, Jalisco, Mexico manufacturing facility by October 31, 2019, ceasing all manufacturing operations at the facility and further consolidating the global acetate manufacturing operations. The company has completed the addition of a new GUR ultra-high molecular weight polyethylene (UHMW-PE) production line at the Nanjing, China manufacturing facility to support significant growth in the electric vehicle market. The new production line adds approximately 15 kt per year of additional product capacity. The company has delivered 1,177 Engineered Materials project wins in the second quarter of 2019 and on track to commercialize more than 4,000 projects for the year.
Further, during the quarter, the company has completed a registered offering of $500 million of U.S. dollar-denominated senior notes due in 2024. The Company simultaneously entered into a cross-currency swap to effectively convert to a euro-denominated borrowing with a net borrowing rate of 1.03 percent.
CE in the second quarter of FY 19 has reported the adjusted earnings per share of $2.38, beating the analysts’ estimates for the adjusted earnings per share of $2.36, as per Zacks Investment Research. The company had reported the adjusted revenue of $1.59 billion in the second quarter of FY 19, missing the analysts’ estimates for revenue of $1.62 billion.
Moreover, Engineered Materials has posted the net sales of $593 million in the second quarter. The volume impact on net sales was a decline of 7 percent sequentially, comprised of a 4 percent decline in volumetric polymer sales primarily due to demand weakness and industry destocking, as well as a 3 percent sequential mix impact which includes the timing of medical sales. The Acetyl Chain posted second quarter net sales of $865 million, as sequential volume growth of 2 percent largely offset a decline in industry acetic acid pricing
Additionally, the capital expenditures in the quarter were $65 million, with roughly half of non-maintenance spend through the first half of the year devoted to cost reduction projects. The Company is on pace for capital expenditures approaching $400 million for the year.