Celanese Corporation (NYSE:CE) Q4 2022 Earnings Call Transcript

Operator: Thank you. Next question is coming from Kevin McCarthy from Vertical Research Partners. Your line is now live.

Kevin McCarthy: Yes, good morning. Lori, can you elaborate on the 1.3 million ton expansion of acetyl capacity at Clear Lake. What are you baking into your numbers with regard to timing of the start-up and operating rate given the current market conditions? And then any thoughts on how you would see that earnings trajectory evolving through this year and into 2024 would be helpful?

Lori Ryerkerk: Yes, so the project itself is going well. We are still anticipating an on-time, on-budget startup mid this year. So, we expect to have it running for, let’s just call it, roughly half of the year. At the time we did the project, we called out while we have the ability to run 1.3 million tons additional, we really did it as a productivity project. So savings that we get from being able to move volumes directly to Europe, savings that we get from catalyst savings, energy savings, et cetera. So of that $100 million a year credit, we probably will only see about $25 million of that this year, because we have start-up costs, we have ramp-up time, all that sort of thing. So I’d expect to see about $25 million of that credit this year.

And then next year, we should be at the full $100 million. Now having said that, to the extent that demand, deliver — continues to grow robustly and energy prices continue to be so favorable on the Gulf Coast, it will make sense to try to run the unit for volume as well. What point that will be at? I couldn’t say at this point. It’s going to depend on demand and raw material and energy economics. But if that were to happen, that clearly is a higher return case for that project than we had with just the base productivity number that was baked in there.

Kevin McCarthy: I see, that’s helpful. And then secondly, if I may, a couple of financial questions for Scott, would you comment on your ’23 capital expenditure budget? And with regard to the first quarter, what level of interest expense are you baking into your EPS guide?

Scott Richardson: Yes. So capital, we still expect to be in kind of that $550 million to $600 million range. And that where we land there will really be dependent upon where we see the demand recovery as well as the outlook into the out years and as we continue to really put the combined EM and M&M portfolios together. And then from an interest expense standpoint, we’re in that kind of 600 — again, that $550 million to $600 million range for the year, and we’ll have about quarter of that here in the first quarter.

Kevin McCarthy: Thank you very much.

Operator: Thank you. Next question today is coming from Frank Mitsch from Fermium Research. Your line is now live.

Frank Mitsch: Hi, good morning, and congrats, Mark Murray, if you’re listening. Lori, I wanted to ask about the level of auto builds that you have embedded in the guide for the year and where you think Celanese can perform relative to that level of industry auto builds?