AdvanSix (NYSE: ASIX), a diversified chemistry company, has reported its financial performance for the first quarter ending March 31, 2024. Despite facing challenges, including operational disruptions at the Frankford, PA manufacturing site, the company has resolved these issues and is optimistic about its future prospects.
First Quarter 2024 Overview:
- Sales experienced a 16% decline compared to the previous year, attributed to a 9% negative impact from market-based pricing and a 7% decrease in volume, primarily due to the operational disruption at the Frankford site.
- The company reported a net loss of ($17.4) million, marking a decrease of $52.4 million compared to the prior year.
- Adjusted EBITDA stood at $0.6 million, reflecting a decrease of $64.8 million compared to the prior year.
- Cash flow from operations decreased to ($36.2) million, a $37.8 million decline compared to the prior year.
- Capital expenditures increased to $35.4 million, up by $10.8 million compared to the prior year.
- Free cash flow decreased to ($71.6) million, down by $48.6 million compared to the prior year.
- The company returned $11 million of cash to shareholders through repurchases and dividends in the first quarter of 2024.
Erin Kane, president and CEO of AdvanSix, expressed gratitude to customers, partners, and teammates for their collaboration during the first quarter to mitigate the impact of the operational disruption. The total unfavorable impact on pre-tax income in the first quarter was approximately $27 million, attributed to lost sales and additional costs.
AdvanSix is currently operating at targeted utilization rates across its integrated value chain and is well-positioned to serve key customers, particularly in Plant Nutrients and the acetone portfolio amid a tight global supply and demand environment. Recent certifications and strong ratings by sustainability organizations underscore the company’s commitment to corporate social responsibility and sustainability performance.
Outlook:
- The company anticipates second-quarter 2024 ammonium sulfate sequential pricing improvement, driven by continued sulfur demand growth and tight North American supply.
- Global acetone supply and demand conditions are expected to remain balanced to tight.
- Modest improvements in nylon industry spreads are projected through 2024.
- Capital expenditures for 2024 are estimated to be $140 million to $150 million, reflecting increased spend on enterprise programs and maintenance projects.
- Planned plant turnarounds are expected to have a pre-tax income impact of $38 to $43 million in 2024, with a larger planned turnaround shifted to the fourth quarter from the third quarter.
Looking ahead, AdvanSix remains optimistic about its future, citing strengthening fertilizer pricing, a tight global acetone supply and demand environment, improving nylon industry spreads, and a return to expected robust plant utilization rates. The company is committed to executing its strategies and maximizing its long-term potential.
