Celanese reported a second quarter 2025 EPS run rate target of $2 per share, with Q3 guidance midpoint at $1.25.
Free cash flow guidance remains strong at $700 million to $800 million for 2025, driven primarily by operations despite $650 million to $700 million in interest expense.
Inventory reduction efforts in Engineered Materials caused a sequential $25 million negative earnings impact in Q3, offset by a prior Q2 benefit.
The company experienced volume weakness in China automotive orders, European demand in Engineered Materials, and the Western Hemisphere Acetyl Chain.
Volumes in the Western Hemisphere acetyl demand are at the lowest levels in 20 years, with Engineered Materials volumes down 5-6% year-over-year.
Impact of Mexico Operational Challenges on EBITDA and Recovery Plan
The Monterrey, Mexico facility faced tooling and equipment issues, impacting backlog and increasing costs, notably affecting EBITDA by nearly $5 million in Q3 2025.
Management identified underinvestment in tooling and equipment as the root cause of operational inefficiencies and quality problems.
The company has initiated leadership changes and allocated capital to upgrade the facility's capabilities, aiming for resolution early in fiscal 2026.
Despite short-term operational issues, leadership emphasized confidence in the recovery plan and long-term business prospects.
The operational challenges are specific to the Mexico plant and are not expected to affect the overall long-term growth outlook.
Dafinchi