Analysis CE
Celanese's cash surge includes a $184 million timing boost
A release of working capital helped the chemicals maker reduce debt. Its new annual forecast points to a much smaller cash contribution in the final quarter.
Celanese generated $538 million of operating cash in Q3, more than twice Q2's $209 million. The chemicals maker reduced debt while keeping its cash balance almost unchanged.
Management said working capital released $184 million, with lower customer receivables a key driver. That reflects the timing of collections, inventory and payments to suppliers.
After $69 million of capital spending and $8 million of distributions to joint venture partners, Celanese reported $461 million of free cash flow.
A higher floor for the annual cash target
The company raised the bottom of its annual free cash flow forecast to $750 million from $700 million, leaving the upper end at $800 million. It generated $604 million in the first nine months.
Research by Ticker Byline shows that the new annual range implies $146 million to $196 million of free cash flow in Q4. That is much less than Q3, consistent with management's expectation that the third quarter would be its strongest cash quarter.
Last year showed a similar pattern: free cash flow fell to $160 million in Q4 from $375 million in Q3.
Cash goes toward the debt bill
Net debt fell by $460 million from June to $10.183 billion. Cash and cash equivalents were $1.362 billion, only $2 million below June.
Celanese says it has repaid all of its 2026 debt maturities. It expects year-end excess cash to cover approximately $1.1 billion of bonds maturing in 2027, while continued cash generation and asset sales support further debt reduction.
One planned sale is still approaching its closing. Celanese agreed to sell another 19% of the Nutrinova food-ingredients joint venture to Mitsui for approximately $152 million. It expects the deal to close in Q4 and would retain 11%.
Earnings improve from last year, ease from Q2
Adjusted earnings were $1.65 a share, up from $1.34 a year earlier and down from $2.45 in Q2. That measure removes selected shutdown, deal and legal costs and applies an adjusted tax rate. The result was within August's $1.35 to $1.75 forecast.
The annual adjusted earnings forecast is now $6.00 to $6.25 a share, versus approximately $6.00 previously.
The Celanese company profile tracks comparable earnings, cash flow, debt and forecasts, alongside the completed Micromax sale and plant closures.