AdvanSix Reports Sharp Decline In Q1 Earnings, But Sees Silver Lining In Supply Dynamics

Zinger Key Points
  • AdvanSix Inc reported a Q1 2024 sales decline of 16% year-over-year, mainly due to pricing and volume issues.
  • Despite financial challenges, AdvanSix expects sequential improvement, citing favorable market conditions and operational efficiencies.

AdvanSix Inc ASIX reported a first-quarter 2024 sales decline of 16% year-to-year to $336.829 million, missing the consensus of $344.633 million.

The sales decline was due to a 9% unfavorable impact of market-based pricing and a 7% decrease in volume primarily due to the operational disruption at the Frankford site.

Adjusted EPS was negative 56 cents, down from $1.30 a year ago, missing the negative 54 cents consensus.

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Adjusted EBITDA declined to $595 thousand from $65.35 million a year ago, with margin contracting to 0.2% from 16.3% the prior year. 

The company reported an operating cash outflow of $36.2 million from a cash flow of $1.575 million a year ago. Free cash flow was negative $71.59 million.

Dividend: ASIX declared a quarterly cash dividend of 16 cents per share, payable May 28, 2024, to stockholders of record as of the close of business on May 14, 2024. 

The company returned $11 million of cash to shareholders through repurchases in the quarter.

“We are currently operating at targeted utilization rates across our integrated value chain and are well positioned to serve our key customers, particularly in Plant Nutrients as the domestic planting season progresses and in our acetone portfolio amid a tight global supply and demand environment,” commented Erin Kane, president and CEO of AdvanSix.

ASIX expects ammonium sulfate sequential pricing improvement for the second quarter amid continued sulfur demand growth and tight North American supply.

For 2024, the company expects Capital Expenditures of $140 million to $150 million.

“As we look forward into the second quarter and beyond, there are a number of tailwinds at our back including strengthening fertilizer pricing, a continued tight global acetone supply and demand environment, an anticipated modest improvement in nylon industry spreads, and a return to expected robust plant utilization rates,” added Kane.

Price Action: ASIX shares closed 0.94% higher at $25.75 on Thursday.

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Image: Shutterstock

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