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Celanese (CE) Inks MoU to Supply Ethylene-Based VAM to Wanwei

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Celanese Corporation (CE - Free Report) has inked a memorandum of understanding (MoU) to supply ethylene-based vinyl acetate monomer (VAM) to Anhui Wanwei Group Co., Ltd. The financial details of the transaction have been kept under wraps.

Notably, the MoU calls for a long-term commercial deal, under which, Celanese will supply Wanwei with its green technology-based VAM from its world-scale chemical industrial facility situated in Nanjing, China.

Reportedly, this will support roughly 50% of Wanwei’s captive product requirements in the manufacturing of chemicals, fibers and new material in China’s Anhui Province. Also, the deal offers a platform for promoting more eco-friendly approaches in the future to support Blue Skies environmental policy of China.

Per management, the agreement exemplifies the continuing commitment of Celanese to sustainable product development and environmental protection. The company is advancing green technologies used in the manufacturing of several emulsion polymers that not only conform with strict environmental standards but also help its customers achieve quality targets and product expectations.

Celanese’s shares have lost 19.3% in the past year against its industry’s 31.4% rise.



In the last month, the company reported earnings from continuing operations of $1.88 per share for first-quarter 2020, down from $2.64 in the year-ago quarter. However, adjusted earnings per share of $2.29 surpassed the Zacks Consensus Estimate of $2.19.

Revenues declined 13.5% year over year to $1,460 million in the first quarter. Moreover, the top line missed the Zacks Consensus Estimate of $1,512.2 million.

Celanese noted that it expects to generate $300-$400 million of incremental cash on account of the actions that it is presently taking on productivity, working capital management and capital expenditure prioritization that enables it to offset challenges related to demand and earnings in 2020.

The company suspended its earlier announced annual adjusted earnings per share guidance for 2020 due to uncertainties regarding the duration and impacts of the coronavirus pandemic.

Celanese Corporation Price and Consensus


Zacks Rank & Stocks to Consider

Celanese currently carries a Zacks Rank #4 (Sell).

Some better-ranked companies in the basic materials space are Equinox Gold Corp. (EQX - Free Report) , Newmont Corporation (NEM - Free Report) and Barrick Gold Corporation (GOLD - Free Report) .

Equinox Gold currently sports a Zacks Rank #1 (Strong Buy) and has a projected earnings growth rate of 231% for 2020. The company’s shares have gained 43.7% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Newmont has a projected earnings growth rate of 85.6% for the current year. The company’s shares have rallied around 103% in a year. It currently has a Zacks Rank #2 (Buy).

Barrick has a projected earnings growth rate of 70.6% for 2020. It currently carries a Zacks Rank #2. The company’s shares have rallied 111.4% in a year.

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