Yahoo Finance Celanese (CE) Declares Force Majeure Due to Supply Disruptions
Celanese Corporation CE declared force majeure and instituted sales controls for acetic acid and vinyl acetate monomer (VAM) in the Western Hemisphere. This decision is driven by severe force majeure conditions and operational setbacks faced by several suppliers of crucial raw materials essential for Celanese's production processes.
The company is currently evaluating the impact of these supply chain disruptions, alongside other operational issues affecting its Acetyl Chain network in the U.S. Gulf Coast. It is undertaking steps to mitigate production losses.
The Acetyl Chain division is committed to meeting customer demands by leveraging its comprehensive network capabilities. Over the years, the business strategically invested in enhancing the flexibility of its integrated supply chain, allowing it to minimize disruptions to customers. During this period of sales control, all non-contracted orders will be assessed individually.
Celanese is facing production shortfalls of acetic acid and VAM at its U.S. Gulf Coast facilities. It expects a 15-20% unfavorable impact in the second quarter due to ongoing issues. To keep supplying customers, Celanese is leveraging its flexibility by using alternative, higher-cost production sites, sourcing externally and adjusting logistics. This will likely increase its costs but minimize the impact on its customers.
Celanese regrets any inconvenience this situation may cause customers and is committed to maintaining close communication to minimize the impact. Further details or timing regarding the full impact on customers or the company's financial outlook cannot be provided at this time, CE noted. It will offer additional updates on resolving these challenges and their financial implications during the second-quarter earnings report.
Celanese’s shares have gained 28.1% in the past year compared with a 10.8% fall of the industry.
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Celanese, on its first-quarter call, stated that it projects adjusted earnings between $2.60 and $3 per share for second-quarter 2024, factoring in an expected impact of approximately 30 cents from the M&M amortization. The company predicted higher earnings performance in the second quarter and into the second half of 2024, driven by improved profitability of its acquired product portfolio, benefits from its Clear Lake expansion, the Uentrop closure and the SAP S/4HANA ERP integration.
Celanese Corporation Price and Consensus
Celanese Corporation price-consensus-chart | Celanese Corporation Quote
Zacks Rank & Key Picks
Celanese currently carries a Zacks Rank #3 (Hold).
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