PQ Group Holdings Inc. (PQG) Tops Q4 EPS by 50c, Revenues Miss

PQ Group Holdings Inc. (NYSE: PQG) reported Q4 EPS of $0.61, $0.50 better than the analyst estimate of $0.11. Revenue for the quarter came in at $281.5 million versus the consensus estimate of $307.28 million.

• Solid quarter performance driven by demand recovery across many end uses and benefit of Performance Chemicals business transformation plan;
• Year results reflect lower volumes from global pandemic, offset by cost actions undertaken at all businesses;
• Net cash provided by operating activities of $223.6 million and Adjusted free cash flow of $152.5 million for the year;
• Portfolio transformation accelerated with agreement for the sale of the Performance Chemicals business for $1.1 billion and the completed sale of Performance Materials for $650 million; and
• Closed strategic acquisition of fast-growing catalyst activation company

“Within the confines of the pandemic-influenced year, PQ delivered solid results in 2020, generated $153 million of adjusted free cash flow and drove an Adjusted EBITDA margin of more than 27 percent. The PQ team demonstrated steadfast character dealing with the uncertainties and complexities of the situation, supporting customers, protecting the business continuity, while tightly managing operations,” said Belgacem Chariag, PQ Chairman, President and Chief Executive Officer. “We are also excited at our growth prospects for 2021 and beyond, as we stand at the cusp of our most notable accomplishments within our ‘Simpler + Stronger’ portfolio transformation. As the economy begins to turn the corner, we are now positioning to be a high growth pure-play catalyst and services company that enables customer transitions to cleaner fuels and a circular economy for plastics.”

GUIDANCE:

PQ Group Holdings Inc. sees FY2021 revenue of $555-565 million, versus the consensus of $1230 million.

With the announced sale of Performance Chemicals, PQ will be reporting this business as a discontinued operation beginning in the first quarter of 2021. Consequently, the company is providing 2021 guidance from continuing operations for Target PQ, which reflects the Refining Services and Catalyst businesses and excludes Performance Chemicals, as below:

• Sales of $555 to $565 million(2)
• Adjusted EBITDA of $215 to $225 million
• Adjusted free cash flow of $75 to $85 million

(2) GAAP sales only; Excludes proportionate 50 percent share of Zeolyst Joint Venture sales target of $140 to $150 million.

For earnings history and earnings-related data on PQ Group Holdings Inc. (PQG) click here.

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