Celanese Corporation Reports 9% Decline in Net Sales for Q1 2025

Celanese Corporation reported a decline in financial performance for the first quarter of 2025, with net sales of $2.39 billion, down 9% from $2.61 billion in the same period last year. The decrease was attributed to lower volumes and pricing across its segments, particularly in the Acetyl Chain and Engineered Materials divisions, driven by decreased global demand and unfavorable currency impacts. Gross profit also fell to $476 million from $554 million, while operating profit decreased to $168 million from $210 million, reflecting a 20% decline.

The company's earnings from continuing operations showed a significant downturn, resulting in a loss of $12 million, or $0.15 per share, compared to a profit of $124 million, or $1.11 per share, in the prior year. This shift was influenced by increased raw material costs, particularly for methanol and ethylene, and a decrease in equity earnings from affiliates, which fell by 60% to $22 million. The effective income tax rate for the quarter was notably negative at -300%, primarily due to valuation allowances on foreign tax credit carryforwards.

In terms of operational developments, Celanese has been focusing on cost reduction and efficiency improvements. The company reported a reduction in selling, general, and administrative expenses to $230 million from $265 million, indicating a strategic effort to manage costs amid challenging market conditions. Additionally, the company is actively managing its debt levels, with total debt increasing to $12.78 billion from $12.58 billion, largely due to new borrowings related to its refinancing activities.

Looking ahead, Celanese anticipates continued demand challenges in key markets, particularly in automotive and construction, as global economic conditions remain tepid. The company is committed to enhancing cash generation and has paused its share repurchase program while evaluating further opportunities for cash conservation. Celanese has also announced a significant reduction in its quarterly dividend by approximately 95%, reflecting its focus on deleveraging and maintaining liquidity in the current economic environment. The company expects to continue monitoring market conditions closely and is prepared to adjust its strategies as necessary to navigate the ongoing challenges.