Huntsman Corporation

Greetings. Welcome to Huntsman's first quarter 2026 earnings call. At this time, all participants are in listen-only mode. The question and answer session will follow today's formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note this conference is being recorded. At this time, I'll turn the conference over to Ivan Marcuse, Vice President of Investor Relations and Corporate Development. Thank you.

You may now begin. Thanks, Rob, and good morning, everyone. Welcome to Huntsman's First Quarter 2026 Earnings Call. Joining us on the call today are Peter Huntsman, Chairman, CEO, and President, and Phil Lister, Executive Vice President and CFO. Yesterday, April 30, 2026, we released our earnings for the first quarter of 2026 via press release and posted it to our website, Huntsman.com. We also posted a set of slides and detailed commentary discussing the first quarter of 2026 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 this 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 or 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 or loss, and free cash flow. You can find reconciliations to the most directly comparable GAAP financial measure in our earnings release, which has been posted to our website at thehuntsman.com. I'll now turn the call over to Peter Huntsman, our chairman and president.

Ivan, thank you very much. Thank you all for taking the time to join us this morning. Before I begin my remarks about our company and recent events, I want to simply say that I hope there's a quick and peaceful resolution to the ongoing conflict in the Middle East. Over the past 40 years, I've had the opportunity to visit every country bordering the Persian Gulf with the exception of Iraq. I have always been treated warmly and fairly by the people I've encountered. I hope that my comments do not come across as being callous in any way to the suffering and fear emanating from this region as I address the economic impact of these events to our bottom line and industry. From the first hours of this conflict, our number one commercial priority has been to increase prices enough to offset rising costs. I believe we've been successful in doing this. This will require continued communications, with our customers and suppliers and also the discipline to make sure that we are not a shock absorber between raw material costs and finished product pricing. Our next priority is operating our plants in a reliable manner to make sure that we have the product to meet our demand. Our operations during the first quarter and going into the second quarter have been excellent. From a sales perspective, we're seeing stronger than expected demand going well into the second quarter. I would say that this is being brought about by three factors. Number one, seasonality as we move into the second quarter and the building season resumes across North America, Europe, and Asia. Number two, customers who are buying ahead of the expected price increases that are being announced. And number three, disruptions that have been seen in certain trade flows that have impacted supply. An example of this would be some of our Malay customers in Europe who have become overly dependent on Chinese supplied Malay, have seen a disruption in supply as raw materials and shipping costs have increased from that region. These three factors are also happening at a time when most inventory levels are very low across many supply chains. These improved Order patterns are being seen as we enter into the second quarter in most of our regions and across many of our products. The obvious countervailing point to all of this is how long does it continue? I can't see order patterns that go through the month of June, but the guidance that we have shared from each division in Q2 reflect what we've seen to date. Today, that visibility is less clear as we look further into the quarter. I struggle to see how inflationary pressures, particularly in areas reliant on imported energy, like much of Asia and Europe, will not see an inevitable downward pressure later in the year as consumer spending gradually shifts towards higher prices. To what degree this occurs is yet to be seen. I am heartened to see the housing starts and durable good orders in the United States better than expected for the month of March. But I'm also keeping an eye on residential permits, a step that precedes construction starts down 11% for the month of March. There will also be some longer-term dislocation of traditional economics. If you were a producer that enjoyed discounted raw materials coming out of Venezuela, Iran, and Russia a few months ago, it is likely that you're not seeing such discounts today, and I highly doubt you'll see them in the foreseeable future. Many customers are looking for closer and more secure sources of supply. Supply chains are sifting and being reassessed. I believe that there will be some lasting impact for certain regions and products that may not seem too apparent today. It is simply too early to know how lasting some of these will be. In short, we are aggressively raising our prices to both cover our cost of our raw materials while also expanding margins from the trough economics that we've been experiencing for the past three years. We will continue to manage our costs and deliver these objectives on budget. We will be focused on volumes and make sure that spot buying also comes with longer term volumes and obligations. I'm glad to see the trends that we're seeing in the second quarter, but we still have a ways to go to get to our normalized margin levels. This will require stable and longer-term demand trends to continue. I feel that we are in a strong position today to capitalize on such changes going forward. Thank you. Operator, with that, we'll open the time up for Q&A.