Huntsman Corporation

Hello and welcome to the Huntsman Corporation second quarter 2024 earnings call and conference. At this time, all participants are in listen-only mode. If anyone should require operator assistance, please press star zero. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. We ask you please limit yourselves to one question and one follow-up, then return to the queue. It's now my pleasure to turn the call over to Ivan Marcuse, Vice President of Investor Relations and Corporate Development. Please go ahead, Ivan.

Thank you, Kevin, and good morning, everyone. Welcome to Huntsman's second quarter 2024 earnings call. Joining us on the call today are Peter Huntsman, Chairman, CEO, and President, and Phil Lister, Executive Vice President and CFO. Last night, on August 5, 2024... After the U.S. equity markets closed, we released our earnings for the second quarter of 2024 via press release and posted it to our website, Huntsman.com. We also posted a set of slides and detailed commentary discussing the second quarter on our website. Peter Huntsman will provide some opening comments shortly, and we will then move to the question and answer session for the remainder of the call. During the call, let me remind you that we may make statements about our projections or expectations for the future. All such statements are forward-looking statements and, while they reflect our current expectations, they involve risks and uncertainties and are not guarantees of future performance. You should review our filings with the SEC for more information regarding the factors that could cause actual results to differ materially from these projections and expectations. We do not plan on publicly updating or revising any forward-looking statements during the quarter. We will also refer to non-GAAP financial measures such as adjusted EBITDA, adjusted net income, and free cash flow. You can find the reconciliations to the most directly comparable GAAP financial measures in our earnings release, which has been posted to our website at huntsman.com. I'll now turn the call over to Peter Huntsman, our chairman, CEO, and president.

Ivan, thank you very much, and thank you all for joining us this morning. I find myself in a rather precarious place this morning, as I usually prepare some opening comments the afternoon before these calls. Over the last 24 hours, swords have been Rattling in the Middle East, triggering massive potential for raw material volatility. And over the past few hours of trading, trillions of dollars, yen, euros, and RMB have been wiped out. And consumer confidence has been reforecasted more times in the polling data for the upcoming presidential election. All of that being said, after five quarters in the chemical industry of massive inventory adjustments, plummeting margins, and a tidal wave of Asian-based oversupply, these most recent events seem quite calm. Our cost initiatives that have been ongoing for the past three years are paying off as we've stayed ahead of inflation. Our focus on cash generation delivered over $50 million of cash flow from our operations in the second quarter. As we outlined plans in the previous earnings call, our volumes year-over-year and quarter-over-quarter were up across the entire business by 9% and 8% respectively. This volume improvement took place as we were able to increase margins and earn what we projected from our previous call. While I continue to be concerned with Europe's highly successful policy of deindustrialization, and excess chemical capacity flowing out of Asia. The single largest catalyst for margin improvement for Huntsman would be a resurgence of commercial and residential construction demand. This will not fully happen until interest rates drop below the current levels. I believe that events in the past few weeks have increased the likelihood and timing of a rate decrease. Third quarter order patterns seem flattish to the second quarter. We remain cautious regarding the second half of the year. The present time is simply too early to have a clear picture of the fourth quarter. That being said, inventory in the supply chain remains low. Our construction, aerospace, infrastructure, power, and elastomer's businesses continue to improve. We will stay focused on cost and cash management is our priority. With that, let's open the line up for any questions.