Celanese Earnings Call Nuggets: TCX EBIT and Supply

Celanese Corporation (NYSE:CE) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.


David Begleiter – Deutsche Bank: Mark, just on the $15 million impact in AI, what was the impact versus Q1 and year-over-year? Was it up or down in terms of this turnaround within supply disruption costs?

Mark C. Rohr – Chairman and CEO: Well, it was the $450 million or so Q1 to Q2 on the surface. I can’t recall anything in Q2 last year.

Steven Sterin – SVP and CFO: Yeah, I think it’s about the same.

Mark C. Rohr – Chairman and CEO: About the same, yes. So the team says here it’s the same either way.

David Begleiter – Deutsche Bank: And just on TCX, what’s your expectation for TCX EBIT contribution or EPS contribution for the back half of the year?

Mark C. Rohr – Chairman and CEO: Yeah, really not very much David. We’re starting a plan of slow – the ethanol market, like all industrial markets in China, is really sloppy today, so we’re just taking our time to bring it up upside. We’re not – in our sort of projections for the year we’re not counting really for any contributions from ethanol as material.

David Begleiter – Deutsche Bank: For breakeven basically.

Mark C. Rohr – Chairman and CEO: Basically.


Duffy Fischer – Barclays Capital: Just a question on the issue of supply. Did that affect North America or Asia, and then was it more of just for gone sales or did you have to go out and purchase product to – then resell it at a loss to your customers?

Mark C. Rohr – Chairman and CEO: Yeah, both. I mean, we supply from other’s locations. We have a global system out there which can negatively impact you and then we actually buy and resell them.

Duffy Fischer – Barclays Capital: Then what was the operating rate for Singapore in the second quarter?

Mark C. Rohr – Chairman and CEO: Well, Duffy, I’m not going to get into that kind of clarity where you all running up facility. We have been running it all year and we try to run it in a way that maximizes profitability for overall business.