AdvanSix Inc (ASIX) 2023 Q4 法說會逐字稿

Good morning, and welcome to the AdvanSix fourth-quarter 2023 earnings conference call. (Operator Instructions) Please note, this event is being recorded.

早安，歡迎參加 AdvanSix 2023 年第四季財報電話會議。（操作員說明）請注意，正在記錄此事件。

I would now like to turn the conference over to Adam Kressel, Vice President of Investor Relations. Please go ahead.

我現在想將會議交給投資者關係副總裁 Adam Kressel。請繼續。

Thank you, Andrea. Good morning, and welcome to AdvanSix's fourth-quarter 2023 earnings conference call. With me here today are President and CEO, Erin Kane; and Senior Vice President and CFO, Michael Preston. This call and webcast, including any non-GAAP reconciliations, are available on our website at investors.advansix.com.

謝謝你，安德里亞。早安，歡迎參加 AdvanSix 2023 年第四季財報電話會議。今天和我在一起的有總裁兼執行長艾琳凱恩 (Erin Kane)；資深副總裁兼財務長 Michael Preston。本次電話會議和網路廣播，包括任何非 GAAP 調節，可在我們的網站 Investors.advansix.com 上取得。

Note that elements of this presentation contain forward-looking statements that are based on our best view of the world and of our business as we see it today. Those elements can change, and the actual results could differ materially from those projected, and we ask that you consider them in that light. We refer you to the forward-looking statements included in our press release and earnings presentation. In addition, we identify the principal risks and uncertainties that affect our performance in our SEC filings, including our annual report on Form 10-K as further updated in subsequent filings with the SEC.

請注意，本簡報的內容包含前瞻性陳述，這些陳述是基於我們對當今世界和業務的最佳看法。這些因素可能會發生變化，實際結果可能與預測結果有重大差異，我們要求您從這個角度考慮它們。我們建議您參閱我們的新聞稿和收益報告中包含的前瞻性陳述。此外，我們在向 SEC 提交的文件中確定了影響我們業績的主要風險和不確定性，包括我們在隨後向 SEC 提交的文件中進一步更新的 10-K 表格年度報告。

This morning, we will review our financial results for the fourth quarter and full-year 2023 and share our outlook for our key product lines and end markets. Finally, we'll leave time for your questions at the end.

今天上午，我們將回顧 2023 年第四季和全年的財務業績，並分享我們對關鍵產品線和終端市場的展望。最後，我們將在最後留出時間回答您的問題。

So with that, I'll turn the call over to AdvanSix's President and CEO, Erin Kane.

因此，我會將電話轉給 AdvanSix 的總裁兼執行長 Erin Kane。

Thanks, Adam, and good morning, everyone. Thank you for joining us and for your continued interest in AdvanSix. As you saw in our press release, AdvanSix navigated a continued challenging end-market environment to close out 2023. We maintained our focus on long-term priorities, including portfolio simplification in the year and further investment for improved through-cycle profitability. Our healthy balance sheet supported our performance as we maintained our organic investments and return of cash to shareholders.

謝謝亞當，大家早安。感謝您加入我們以及對 AdvanSix 的持續關注。正如您在我們的新聞稿中看到的那樣，AdvanSix 在持續充滿挑戰的終端市場環境中度過了難關，並在 2023 年結束了。我們繼續關注長期優先事項，包括年內簡化投資組合以及進一步投資以提高整個週期的獲利能力。我們健康的資產負債表支持了我們的業績，因為我們維持了有機投資並向股東返還現金。

Core to our long-term strategy is accelerating growth in the most profitable areas of our portfolio, continuous improvement to strengthen the underlying earnings power of this business and sustaining our cost-advantaged business model.

我們長期策略的核心是加速我們投資組合中最獲利領域的成長，持續改善以增強該業務的潛在獲利能力，並維持我們具有成本優勢的業務模式。

While the nylon environment has been pressured by unfavorable global industry supply and demand conditions for several quarters now, we've continued to see resilient performance within our acetone portfolio and solid results from our plant nutrients business. We'll provide more color on our outlook for 2024 later in the call.

雖然尼龍環境在幾個季度內受到全球行業供需狀況不利的壓力，但我們的丙酮產品組合繼續保持彈性表現，並且我們的植物營養素業務取得了堅實的業績。我們將在稍後的電話會議中對 2024 年的前景提供更多資訊。

So as we look forward, our focus is to perform in the current set of industry dynamics and to execute on the levers in our control, including cost discipline and working capital optimization that will be key mitigation to our operational headwinds as we have started the year. To support our long-term potential, it is also key that we invest to address enterprise risk mitigation, advance our IT platforms to achieve digital transformation, and deliver growth through projects like our SUSTAIN program.

因此，展望未來，我們的重點是在當前的行業動態中發揮作用，並在我們控制的槓桿上執行，包括成本紀律和營運資本優化，這將是我們年初時緩解營運逆風的關鍵。為了支持我們的長期潛力，我們還必須投資解決企業風險緩解問題、推進我們的 IT 平台以實現數位轉型，並透過 SUSTAIN 計畫等專案實現成長。

Now let me turn the call over to Mike.

現在讓我把電話轉給麥克。

Okay. Thanks, Erin, and good morning, everyone. I'm now on slide 4, where I'll provide a summary of the full-year 2023 financials. Our results declined in 2023 against a record prior year. Sales were down 22%, primarily driven by pricing. Volume was flat overall pointing to the benefits of our diverse product portfolio and cost-advantaged position.

好的。謝謝艾琳，大家早安。我現在正在看第四張投影片，我將在其中提供 2023 年全年財務狀況的摘要。2023 年，我們的業績較前一年創歷史新高有所下降。銷售量下降 22%，主要受定價影響。整體銷售量持平，這顯示我們多樣化的產品組合和成本優勢地位的好處。

Adjusted EBITDA of $154 million was down 50% from the prior year, driven primarily by unfavorable market-based pricing, net of raw material costs. We continue to focus on expanding the earnings power of our business and improving annual through-cycle profitability as evidenced by the resilient performance relative to prior troughs achieved in 2019 and 2016.

調整後 EBITDA 為 1.54 億美元，比上年下降 50%，主要是由於不利的市場定價（扣除原材料成本）所致。我們繼續專注於擴大業務盈利能力並提高年度整個週期盈利能力，2019 年和 2016 年相對於之前低谷的彈性業績證明了這一點。

Adjusted EPS was $2.14 per share. Our effective tax rate was 21.1% versus 23.9% in 2022, primarily driven by research tax credits and tax benefits related to the vesting of equity compensation. We anticipate our full-year 2024 effective tax rate to be approximately 24%.

調整後每股收益為 2.14 美元。我們的有效稅率為 21.1%，而 2022 年為 23.9%，這主要是由研究稅收抵免和與股權報酬歸屬相關的稅收優惠所推動的。我們預計 2024 年全年有效稅率約為 24%。

Free cash flow declined year over year as a result of the lower net income and the unfavorable impact of changes in working capital as well as higher capital investments.

由於淨利潤下降以及營運資本變化和資本投資增加的不利影響，自由現金流較去年同期下降。

Now let's turn to slide 5 to discuss the fourth-quarter performance. Sales was $382 million, decreased approximately 5% versus the prior year. Market-based pricing was unfavorable by 22%. This primarily reflects reduced ammonium sulfate pricing amid low raw material input costs and a more stable global nitrogen supply environment, as well as lower nylon pricing. Raw material pass-through pricing was favorable by 1% as a result of a net cost increase in benzene and propylene.

現在讓我們轉向投影片 5 來討論第四季的業績。銷售額為 3.82 億美元，比上年下降約 5%。基於市場的定價不利了 22%。這主要反映了在原料投入成本較低和全球氮供應環境更穩定的情況下硫酸銨價格的下降，以及尼龍價格的下降。由於苯和丙烯的淨成本增加，原物料轉手定價有利 1%。

Sales volume increased approximately 16% in the quarter, primarily driven by higher export shipments in both ammonium sulfate and nylon. Adjusted EBITDA was approximately $15 million, down from $67 million in the prior-year period. Pricing of raw materials was by far the primary driver of the earnings decline.

本季銷量成長約 16%，主要受到硫酸銨和尼龍出口出貨量增加的推動。調整後 EBITDA 約 1,500 萬美元，低於去年同期的 6,700 萬美元。迄今為止，原物料定價是獲利下降的主要驅動因素。

Performance across our caprolactam and nylon portfolio presented a significant headwind year over year. Ammonium sulfate on a net price over natural gas and sulfur basis was also down with lower pricing, partially offset by a reduction in raw material input costs.

我們的己內醯胺和尼龍產品組合的表現逐年呈現顯著的阻力。硫酸銨相對於天然氣和硫磺的淨價也因價格下降而下降，但部分被原物料投入成本的下降所抵銷。

Chemical intermediates price of raw material spread was up, supported by an increase in acetone margin over propylene costs. Plant costs were a modest tailwind in the quarter, driven primarily by lower natural gas utility costs, while volume and other items were also favorable, reflecting higher ammonium sulfate and nylon export sales.

受丙酮利潤高於丙烯成本增加的支撐，原料化學中間體價格價差上漲。本季工廠成本是一個溫和的推動因素，主要是由於天然氣公用事業成本下降，而銷售和其他項目也有利，反映出硫酸銨和尼龍出口銷售的增加。

Adjusted earnings per share was a loss of $0.10. The effective tax rate was 38.3% in the quarter. And finally, free cash flow was approximately $22 million in the quarter. Cash flow from operations of $60 million decreased roughly $9 million versus the prior year. This was primarily due to lower net income, partially offset by the favorable impact of changes in working capital. Capital expenditures of $38 million in the quarter increased $10 million versus the prior year, primarily reflecting increased spend on enterprise programs and other maintenance projects.

調整後每股收益虧損 0.10 美元。該季度的有效稅率為38.3%。最後，本季的自由現金流約為 2,200 萬美元。營運現金流為 6,000 萬美元，比上年減少約 900 萬美元。這主要是由於淨利潤下降，但部分被營運資本變動的有利影響所抵銷。本季資本支出為 3800 萬美元，比前一年增加了 1000 萬美元，主要反映了企業計劃和其他維護項目支出的增加。

Now let me turn the call back to Erin.

現在讓我把電話轉回艾琳。

Thanks, Mike. I'm now on slide 6 to discuss each of our key product lines. Starting with nylon. While significant year-over-year declines in industry spreads continued through the fourth quarter, we did begin to see some stabilization and improvement sequentially of prior trough levels.

謝謝，麥克。我現在在投影片 6 上討論我們的每條關鍵產品線。從尼龍開始。儘管第四季度行業利差繼續同比大幅下降，但我們確實開始看到先前低谷水平的穩定和改善。

While this is encouraging, we continue to see weak demand and varying regional dynamics and trade flows, resulting in the global composite underperforming the Asia benchmarks. We've seen China's global nylon exports reach all-time highs in 2023 as their slower growth economy led to increased low-priced exports to the rest of the world.

雖然這令人鼓舞，但我們繼續看到需求疲軟以及不同的區域動態和貿易流，導致全球綜合指數表現遜於亞洲基準。我們看到，隨著經濟成長放緩導致對世界其他地區的低價出口增加，中國的全球尼龍出口量將在 2023 年創下歷史新高。

Here in North America, the higher interest rate environment has unfavorably impacted building and construction markets as well as consumer spending, impacting packaging applications. Consumer durables within the engineered plastics space has also remained weak, while all applications have been more resilient.

在北美，較高的利率環境對建築市場以及消費者支出產生了不利影響，進而影響了包裝應用。工程塑膠領域的耐用消費品也仍然疲軟，而所有應用都更具彈性。

As previously shared, for our business, we've seen a higher share of export sales, both caprolactam and nylon resin, which does come with a mixed consideration for our performance. While not at 4Q levels, our first-half 2024 exports are expected to be higher year over year.

正如之前所分享的，對於我們的業務，我們看到己內酰胺和尼龍樹脂的出口銷售份額較高，這確實對我們的業績產生了複雜的影響。雖然未達到第四季的水平，但我們 2024 年上半年的出口預計將年增。

In the fertilizer space, we've seen a multi-quarter reset in nitrogen pricing amid a more stable supply environment and lower energy costs. While we did see cautious buying behavior exiting the year, pricing did follow the initial fall fill in line with historical sequential averages. We remain confident that the underlying industry fundamentals supported by crop prices, fertilizer affordability, and expected planted acres will continue to support nutrient demand into the 2024 spring application.

在化肥領域，我們看到氮肥價格在供應環境更加穩定和能源成本降低的情況下經歷了多個季度的調整。雖然我們確實看到今年退出了謹慎的購買行為，但定價確實遵循了最初的下跌填充，與歷史連續平均水平一致。我們仍然相信，由作物價格、化肥承受能力和預期種植面積支撐的行業基本面將繼續支持 2024 年春季施用的養分需求。

The USDA is projecting a decline in inflation-adjusted farmer profitability as a result of rising costs and lower crop prices. However, the absolute level remains at long-term historical averages. Overall, demand remains stable, and we are gearing up to serve our key customers as we move into the heart of the domestic planting season.

美國農業部預計，由於成本上升和農作物價格下降，經通膨調整後的農民獲利能力將下降。然而，絕對水平仍處於長期歷史平均水平。總體而言，需求保持穩定，隨著我們進入國內種植季節的中心，我們正在準備為我們的主要客戶提供服務。

Lastly, in chemical intermediates. Industry-realized acetone prices over refinery grade propylene costs continue to improve in the fourth quarter. While acetone demand has seen softness, particularly into the large buyer end applications, we see supply as balanced to tight globally. This has been supported by persistent lower global phenol operating rates on reduced demand into value chain serving building and construction and other industrial applications.

最後是化學中間體。第四季度，產業實現的丙酮價格高於煉油廠級丙烯成本持續改善。儘管丙酮需求疲軟，尤其是大型買家終端應用，但我們認為全球供應從平衡到緊張。由於建築和其他工業應用價值鏈的需求減少，全球苯酚開工率持續較低，支撐了這一趨勢。

Across the rest of our intermediate portfolio, demand has remained soft. For our US amines business, which largely serves the ag chemical space, we've continued to face destocking headwinds as retailers and growers work through higher inventory.

在我們的其他中間產品組合中，需求仍然疲軟。對於我們主要服務於農業化學品領域的美國胺業務來說，隨著零售商和種植商應對庫存增加，我們繼續面臨去庫存的阻力。

Now let's turn to the next slide. As we shared in our press release, we expect CapEx of $140 million to $150 million in 2024. This reflects increased spend to address critical enterprise risk mitigation and growth projects in addition to our core replacement maintenance and health, safety, and environmental investments.

現在讓我們轉到下一張投影片。正如我們在新聞稿中分享的那樣，我們預計 2024 年的資本支出為 1.4 億至 1.5 億美元。這反映了除了我們的核心更換維護以及健康、安全和環境投資之外，用於解決關鍵企業風險緩解和成長項目的支出增加。

We recognize the challenges we're facing in some of our end markets. However, we continue to focus on making the necessary investments at the right time to support our long-term performance. We have a rigorous prioritization process that evaluates a variety of factors, including asset life, risk, compliance, return profiles, and other factors culminating to an execution plan over the short, medium, and long term.

我們認識到我們在一些終端市場面臨的挑戰。然而，我們繼續專注於在正確的時間進行必要的投資，以支持我們的長期表現。我們有嚴格的優先流程，評估各種因素，包括資產壽命、風險、合規性、回報概況以及最終形成短期、中期和長期執行計劃的其他因素。

We have two discrete enterprise programs at our Frankfurt phenol plant, unrelated to the first-quarter operational disruption that are primarily driving the increased spend in 2024. These projects are targeting upgrades to critical infrastructure and operational efficiency. The first is a rehabilitation of our dock, which is critical to support our integrated value chain and movement of key raw and intermediate materials within our own system and to and from customers and suppliers.

我們在法蘭克福苯酚工廠有兩個獨立的企業計劃，與第一季營運中斷無關，而這主要推動了 2024 年支出的增加。這些項目的目標是升級關鍵基礎設施和營運效率。首先是修復我們的碼頭，這對於支援我們的整合價值鏈以及關鍵原材料和中間材料在我們自己的系統內以及與客戶和供應商之間的流動至關重要。

The second is an upgrade and the installation of a new boiler, which we expect to drive operational and cost savings benefits as well as reduced NOx emissions.

第二個是升級和安裝新鍋爐，我們預計這將帶來營運和成本節約效益，並減少氮氧化物排放。

Let's turn to slide 8 for more detail on the growth and cost savings investments. Our SUSTAIN program is the primary driver of near-term growth capital investment with approximately $75 million of spend between 2024 and 2027.

讓我們翻到投影片 8，以了解更多有關成長和成本節約投資的詳細資訊。我們的 SUSTAIN 計畫是近期成長資本投資的主要驅動力，2024 年至 2027 年間支出約為 7,500 萬美元。

Ammonium sulfate continues to be the primary go-to for sulfur nutrition with continued strong consumption growth. North American customers require the granular form of sulfate, and our SUSTAIN program is designed to meet that growing need.

隨著消費量持續強勁成長，硫酸銨仍然是硫營養品的主要選擇。北美客戶需要顆粒狀的硫酸鹽，我們的 SUSTAIN 計畫旨在滿足這種不斷增長的需求。

As we progress this multi-year program, we endeavor to provide greater clarity to the timing of our investments and expected outcomes. As a reminder, SUSTAIN is a series of projects targeting expansion of our granular ammonium sulfate production predominantly through increased conversion by approximately 200,000 tons per year. That represents a nearly 20% increase.

隨著我們推進這項多年期計劃，我們努力更加明確我們的投資時機和預期成果。需要提醒的是，SUSTAIN 是一系列項目，旨在主要透過每年增加約 20 萬噸轉化率來擴大我們的顆粒硫酸銨產量。這意味著增長了近 20%。

This program wins on multiple fronts as it also targets no increases in net energy consumption or emissions. It also improves domestic customer logistics through improved efficiency for truck and rail loading. Benefits are expected to phase in over the investment period as individual components of each project come online.

該計劃在多個方面取得了勝利，因為它還以不增加淨能源消耗或排放為目標。它還透過提高卡車和鐵路裝載效率來改善國內客戶物流。隨著每個項目的各個組成部分上線，預計效益將在投資期間逐步顯現。

All projects are proceeding in front-end engineering design with investment and execution priorities now firmed up for the next two years. We expect production capability by the end of 2024 to reach a milestone of 68% to 69% conversion as compared to our current target of approximately 65%. And by completion of this program, we anticipate roughly 75% granular conversion.

所有項目均正在進行前端工程設計，未來兩年的投資和執行優先事項現已確定。我們預計到 2024 年底，產能轉換率將達到 68% 至 69% 的里程碑，而我們目前的目標約為 65%。完成該計劃後，我們預計粒度轉換率約為 75%。

The return profile for our SUSTAIN program remains robust with expected IRRs approximating our 20% target hurdle rate. We also continue to progress on grant funding from the USDA through the fertilizer production expansion program, supporting innovative domestic fertilizer production.

我們的 SUSTAIN 計畫的回報狀況仍然強勁，預期 IRR 接近我們 20% 的目標門檻率。我們也繼續透過化肥生產擴張計畫獲得美國農業部的撥款，支持創新的國內化肥生產。

Now let's turn to slide 9 to wrap up before moving to Q&A. Now more than ever, the strength of our business model and our position as a diversified chemistry company will serve us well as we navigate the current set of dynamics. We expect nylon industry margins to remain stabilized near current levels amid weak demand. This means that we continue to anticipate higher nylon solutions exports year over year in the near term.

現在讓我們先看投影片 9 進行總結，然後再進行問答。現在，我們的業務模式的優勢和我們作為一家多元化化學公司的地位比以往任何時候都更加有利於我們應對當前的動態。我們預計，在需求疲軟的情況下，尼龍產業利潤率將保持穩定在當前水準附近。這意味著我們繼續預期近期尼龍解決方案出口量將年增。

In our plant nutrients business, we anticipate strong seasonal demand supported by continued favorable ag industry fundamentals. So we do expect first half 2024 year-over-year pricing declines amid a lower nitrogen pricing environment.

在我們的植物營養素業務中，我們預計在持續有利的農業基本面的支持下，季節性需求將強勁。因此，我們確實預計，在氮肥定價環境較低的情況下，2024 年上半年價格將年減。

In our chemical intermediates portfolio, we expect balanced to tight global acetone supply and demand conditions. Operationally, we expect the pretax income impact of planned plant turnarounds to be $38 million to $43 million in 2024 compared to approximately $30 million in 2023. The majority of this impact will be incurred in the third quarter.

在我們的化學中間體產品組合中，我們預期全球丙酮供需狀況將趨於平衡至緊張。在營運方面，我們預計工廠計畫檢修對 2024 年稅前收入的影響將為 3,800 萬至 4,300 萬美元，而 2023 年約為 3,000 萬美元。大部分影響將在第三季產生。

Now before we conclude, I wanted to spend a moment providing an update on the previously disclosed process-based operational disruption at our Frankfurt manufacturing site. As a result of a delayed ramp to planned utilization rates, we are now anticipating a total unfavorable impact to pretax income in the first quarter of $23 million to $27 million. This is comprised of the impact of lost sales and other additional costs, including purchases of replacement products and incremental plant spend.

在我們結束之前，我想花點時間提供先前披露的法蘭克福製造工廠基於流程的營運中斷的最新情況。由於計劃利用率延遲提升，我們目前預計第一季稅前收入將受到 2,300 萬至 2,700 萬美元的不利影響。這包括銷售損失和其他額外成本的影響，包括購買替代產品和增量工廠支出。

We are on the right path and have Frankfurt currently operating at 65% to 75% of its planned utilization rates, which is enabling us to ramp back up Hopewell and Chesterfield to targeted rates.

我們正走在正確的道路上，法蘭克福目前的營運率為計畫利用率的 65% 至 75%，這使我們能夠將霍普韋爾和切斯特菲爾德的利用率恢復到目標水準。

While this has been a difficult start to the year operationally, I would like to thank our customers and partners for their collaboration to mitigate value chain impact. And I'd also like to acknowledge our AdvanSix teammates that have been focused on the safe operation of our sites during this time for their commitment and focus on getting the job done. We have much of the year ahead of us and are committed to delivering for our key stakeholders.

雖然今年的營運開局很艱難，但我要感謝我們的客戶和合作夥伴為減輕價值鏈影響而進行的合作。我還要感謝我們的 AdvanSix 團隊成員，他們在這段時間裡一直專注於我們網站的安全運營，他們的承諾和專注於完成工作。今年我們還有很多時間，並致力於為我們的主要利害關係人提供服務。

With that, Adam, let's move to Q&A.

Adam，接下來我們進入問答環節。

Great. Thanks, Erin. Andrea, can you please open the line for questions?

偉大的。謝謝，艾琳。安德里亞，您能打開提問線嗎？

(Operator Instructions) Vincent Anderson, Stifel.

（操作員說明）Vincent Anderson，Stifel。

I wanted to start with amsul. The revenues in the quarter were better than at least I was expecting given where export pricing had lingered for most of the quarter. Were your overall volumes up year over year? Or did you start to see better pricing in December, whether market-base are just placing tons in higher-value regions?

我想從阿姆蘇爾開始。鑑於本季大部分時間出口定價徘徊不前，本季的營收至少比我的預期好。你們的整體銷量年增了嗎？或者你在 12 月開始看到更好的定價，市場基礎是否只是在高價值地區投放大量資金？

Yeah, Vincent. From a year-over-year perspective, volume was up. If you look at the topline growth, we were looking at roughly $60 million of volume improvement from a year-over-year perspective, that's worth about 15% increase year over year. A good amount of that was ammonium sulfate, also a good amount of volume from a nylon and caprolactam perspective. Most of that was exports. So for AS, in particular, we had a really strong export quarter, and that's what drove the majority of the volume from a year-over-year perspective.

是的，文森。從年比來看，成交量有所增加。如果你看一下營收成長，我們發現銷量年增了約 6,000 萬美元，相當於年增了 15% 左右。其中大量是硫酸銨，從尼龍和己內醯胺的角度來看也是大量的。其中大部分是出口。因此，特別是對於 AS 來說，我們的出口季度非常強勁，從年比的角度來看，這就是推動大部分銷售的原因。

Got you. And that kind of feeds into my next question, which may be partially answered, but you recorded lower deferred income and customer advances. Was that largely the result of absolute pricing, or were your pre-buys consciously managed lower this year?

明白你了。這就是我的下一個問題，這個問題可能得到了部分回答，但您記錄的遞延收入和客戶預付款較低。這很大程度上是絕對定價的結果，還是您今年有意識地降低了預購價格？

Yeah, no. When we think about where the fundamental market is, and certainly, we take our customers' signals here as well as approaching every year's prebuy program and sell program. So we would say that our volumes were at long-term historical averages. But pricing, just given the entire complex on energy and nitrogen nutrient values, was down.

是的，不。當我們思考基本市場在哪裡時，當然，我們會在這裡獲取客戶的訊號，並接近每年的預購計劃和銷售計劃。所以我們可以說我們的交易量處於長期歷史平均。但考慮到整個綜合體的能量和氮營養價值，價格下降了。

Okay. All right. Excellent. And then kind of a similar question around intermediates. That was a bit better than we were expecting. So I'm curious if that was really all acetone pricing, or are we starting to see some early recovery in oximes and maybe the amines that go into agricultural use?

好的。好的。出色的。然後是關於中間體的類似問題。這比我們預期的要好一些。所以我很好奇這是否真的都是丙酮定價，或者我​​們是否開始看到肟以及可能用於農業用途的胺的一些早期復甦？

Yeah. I mean, the majority of really the intermediates improvement was more market-related pricing and most of that was with acetone. Acetone strength given the favorable supply demand conditions overall.

是的。我的意思是，中間體的大部分改進實際上是與市場相關的定價，其中大部分是丙酮。鑑於整體有利的供需條件，丙酮走強。

Sure. Okay. And then just a real quick one, and I'll give someone else to turn. But is there any risk here that you don't have enough output from Frankfurt to build inventory ahead of the planned turnaround and we see more purchased product around the third quarter or the second quarter? Or is this still at 65% to 75% of planned utilization were good in terms of balance of the year risk?

當然。好的。然後就非常快地轉一轉，然後我會派其他人來轉。但是，這裡是否存在任何風險，即法蘭克福沒有足夠的產量來在計劃週轉之前建立庫存，並且我們在第三季度或第二季度左右看到更多的採購產品？或者，就年度風險平衡而言，計劃利用率仍處於 65% 至 75% 的水平是否良好？

Yes. So certainly, the current rates we're at are supporting us with some modest purchases at this level to bring back the full rate at the Hopewell and Chesterfield here. Just given our normal level of integration, 75% to 80%, you can -- those numbers are out there relative to how the system works on average over long stretches.

是的。因此，當然，我們目前的利率支持我們在這個水平上進行一些適度的購買，以恢復霍普韋爾和切斯特菲爾德的全額利率。只要考慮到我們正常的整合程度（75% 到 80%），您就可以——這些數字是相對於系統長期平均運作方式而言的。

We certainly, as you might expect, we pulled forward the maintenance work at Hopewell, just given the slowdown that we are proactive in that nature. And our key focus right now is to get our Frankfurt facility stabilized and up and running. The systems returned, the return of flow to our customers has been very collaborative with us during this time, and we're re-evaluating our plans for the remainder of the year on timing and execution to be successful.

當然，正如您所期望的那樣，我們推遲了合和的維護工作，只是考慮到我們在這方面的積極主動性有所放緩。我們現在的重點是讓我們的法蘭克福工廠穩定並正常運作。在此期間，系統已恢復，客戶流已恢復，我們與我們進行了非常密切的合作，我們正在重新評估今年剩餘時間的計劃，以確定時間和執行是否成功。

Okay. All right.

好的。好的。

David Silver, CL King.

大衛·西爾弗，CL·金。

I wanted to maybe just start with maybe just a couple of details regarding the SUSTAIN program. And in particular, maybe I missed it before, but I wasn't aware of the grant funding from the USDA opportunity there. Could you just maybe touch on that? What is maybe the aspect of your project that is most directly, I guess, attributable or I can't think of the right word, but which would the funding request be tied to? Is it the emissions performance? Is it something in the actual process? Just if you could just talk about that broadly.

我想先從一些有關 SUSTAIN 計劃的細節開始。特別是，也許我之前錯過了，但我不知道美國農業部提供的贈款資金在那裡。您能談談這一點嗎？我想，你的專案的哪個方面可能是最直接的，或者我想不出合適的詞，但資金請求與哪個方面相關？是排放性能嗎？是實際過程中的事嗎？如果你能廣泛地談論這一點就好了。

And then if you could also size the amount of the potential grant funding range or whatever, that would be helpful. And is the $75 million CapEx net of any grant funding? Or is that the gross figure before any funding?

然後，如果您還可以確定潛在撥款範圍或其他金額的大小，那將會有所幫助。7500 萬美元的資本支出是否扣除任何補助金？還是這是沒有任何資金之前的總數？

Certainly. So the grant from the USDA is actually in support of increased fertilizer production for US growers and US farmers. So really that given the growing need of sulfur in the country and our ability to generate more capacity and grow with those needs, we think we are a great match and certainly are working through the process with them.

當然。因此，美國農業部的撥款實際上是為了支持美國種植者和美國農民增加化肥產量。因此，實際上，考慮到該國對硫的需求不斷增長，以及我們產生更多產能並根據這些需求增長的能力，我們認為我們是一個很好的匹配，並且肯定正在與他們合作。

So it really just about improving that we have increased locally produced fertilizer for the US market. And so that is the key. There are steps to the grant process, right? So we continue to proceed. And when we think about the opportunity set, it's between $10 million to $15 million opportunity for us against our total spend.

因此，我們為美國市場增加了本地生產的化肥，這實際上只是為了改善。這就是關鍵。撥款過程有步驟，對吧？所以我們繼續前進。當我們考慮機會集時，我們的總支出為我們提供了 1000 萬至 1500 萬美元的機會。

Okay. Thank you for that. I'd like to switch over to maybe to get some of your thoughts about the global supply-demand balance in nylon and caprolactam and in particular, I guess, competitive reactions to the current fundamental environment.

好的。謝謝你。我想轉而了解您對尼龍和己內酰胺全球供需平衡的一些想法，特別是我認為對當前基本環境的競爭反應。

But my sense is that there are some producers even with the stabilization that you cited in your charts. But there are some producers who are just not making suitable returns that, I don't know, would consider sustainable.

但我的感覺是，即使您在圖表中引用了穩定的情況，也有一些生產商。但有些生產商並沒有獲得適當的回報，我不知道這些回報是否會被認為是可持續的。

And from your perspective here regionally, I guess, have you noticed any behavioral shifts? In other words, would the Chinese producers be reducing production rates in response to lower domestic demand? Or have there been some adjustments in production or, I don't know, the facilities that you see operating in Europe or elsewhere? But beyond shifting around your marketing strategies a little bit, have you noted any concrete shifts that might lend to a firmer fundamental balance, let's say, over the medium term?

我想，從您所在地區的角度來看，您是否注意到任何行為變化？換句話說，中國生產商是否會降低生產力以因應國內需求下降？或者，我不知道，您在歐洲或其他地方看到的生產設施是否進行了一些調整？但除了稍微改變你的行銷策略之外，你是否注意到任何可能在中期實現更牢固的基本平衡的具體轉變？

Yes. If I provide a little context for you, David, on current operating rates as we've seen certainly at the start of the year, China is running closer to 80%. That continues to be a strong, healthy rate for them. And it's a rate of which they need to export vis-à-vis their internal domestic needs.

是的。David，如果我向您提供一些關於當前開工率的背景信息，正如我們在今年年初所看到的那樣，中國的開工率接近 80%。對他們來說，這仍然是一個強勁、健康的比率。這是他們需要相對於國內需求出口的比率。

That has had a ripple effect. You've got the rest of Asia operating at about 50%, right? So when we talk about the impact of these trade flows and then trying to begin to export to the rest of the world into the rest of Asia into Europe. Europe is operating around 60% as well. Structurally, it is a higher cost region. And so that is the area that we continue to watch.

這產生了連鎖反應。亞洲其他地區的營運率約為 50%，對吧？因此，當我們談論這些貿易流動的影響，然後試圖開始向世界其他地區、亞洲其他地區、歐洲出口時。歐洲的營運率也約為 60%。從結構上來說，這是一個成本較高的地區。這就是我們繼續關注的領域。

When you think about the regional balances, North America, as the markets and demand recovers are relatively balanced to slightly long. Europe is structurally long. Rest of Asia is structurally long as is China to some degree as well.

當你考慮區域平衡時，北美隨著市場和需求的復甦相對平衡到略長。歐洲在結構上很長。亞洲其他地區的結構較長，中國在某種程度上也是如此。

So I think you're asking around, are we seeing anyone yet announcing a sign of closure? Again, there are definitely lines that are not running, lines that are curtailed in rates, but we have not yet seen definitive calls made. But certainly, the areas that we would watch will be those regions that are structurally long.

所以我想你在四處詢問，我們是否看到有人宣布關閉的跡象？同樣，肯定有一些線路沒有運行，線路的費率被削減，但我們還沒有看到明確的電話。但可以肯定的是，我們要關注的區域將是那些結構上較長的區域。

Okay. Maybe the last question, and I apologize, I always feel like a dumb chemicals analyst here. But at a couple of points, you -- in talking about critical investments for the long term, you, I guess, you used the terminology critical enterprise risk mitigation, right? And I'm kind of scratching my head there, but could you just flesh that out a little bit more. I mean, is this a cyber defense kind of thing? Or what types of activities are included in a critical enterprise risk mitigation program as you envision it?

好的。也許是最後一個問題，我很抱歉，我總覺得自己像個愚蠢的化學品分析師。但在一些問題上，您在談論長期的關鍵投資時，我想您使用了「關鍵企業風險緩解」這個術語，對嗎？我有點摸不著頭腦，但你能再具體一點嗎？我的意思是，這是網路防禦之類的事情嗎？或是您設想的關鍵企業風險緩解計畫中包含哪些類型的活動？

Sure. So one may ask us as you may be trying to potentially procure, is why couldn't we manage some of these programs within our base CapEx framework, right? And we could, but then we would then need to sacrifice the ongoing, I would say, sustaining replacement maintenance at some of our sites, right? Because these are larger projects in nature, they are lumpier in scale.

當然。因此，當您可能嘗試潛在採購時，有人可能會問我們，為什麼我們不能在我們的基本資本支出框架內管理其中一些項目，對嗎？我們可以，但然後我們需要犧牲正在進行的，我想說的是，在我們的一些站點上維持更換維護，對嗎？由於這些項目本質上是較大的項目，因此其規模也更加龐大。

And so when you think about enterprise risk, we think about supply chain risk, we think about climate risk, we think about cyber risk. We think of it - the totality of risk factors that we disclosed in our 10-K.

因此，當您考慮企業風險時，我們會考慮供應鏈風險，我們會考慮氣候風險，我們會考慮網路風險。我們認為它是我們在 10-K 中揭露的風險因素的總體。

Now when we think about these projects right now, we've got the dock. That dock at Frankfurt is the start of our entire value chain, right? And the length of service and its needs, and it's a large project for the scale. And it's not a Frankfurt doc per se. It's an AdvanSix stock, right, that is necessary to maintain for the entirety of the system.

現在，當我們考慮這些項目時，我們已經有了碼頭。法蘭克福的碼頭是我們整個價值鏈的起點，對吧？服務年資及其需求，就規模而言是一個大項目。它本身並不是法蘭克福醫生。這是 AdvanSix 庫存，對吧，維護整個系統所必需的。

Likewise, the boiler, this is a standard replacement maintenance boiler program that we would put into our base framework. Again, in our integrated value chain, this is a significant switch to handling a critical utility at a key site that's moving forward. And again, because of the approach we took for adding rate redundancy and resiliency to a site, we put it in that category. But again, long-term compliance risk, one might think regulatory changes could fall into this.

同樣，鍋爐，這是一個標準的更換維護鍋爐程序，我們將其放入我們的基礎框架中。同樣，在我們的整合價值鏈中，這是在向前發展的關鍵站點處理關鍵公用事業的重大轉變。同樣，由於我們為網站添加速率冗餘和彈性所採取的方法，我們將其歸入該類別。但同樣，長期合規風險，人們可能會認為監管變化可能會落入其中。

If you think back to when we spun, we did have a program that we would view as enterprise critical risk mitigation associated with our multi-year NOx reduction program, right? So these are the types of things that we feel are over and above what would be prudent to manage into and within our base $75 million sustaining maintenance CapEx for each. That manages the base of the business. Let me pause. I hope that helps a little bit.

如果您回想一下我們旋轉時的情況，我們確實有一個計劃，我們將其視為與我們的多年氮氧化物減排計劃相關的企業關鍵風險緩解措施，對吧？因此，我們認為這些類型的事情超出了我們在 7500 萬美元的維持維護資本支出基礎上謹慎管理的範圍。這管理著業務的基礎。讓我暫停一下。我希望這能有所幫助。

Okay. Great. I'm going to get back in the queue.

好的。偉大的。我要回到隊列中。

(Operator Instructions) This will conclude our question-and-answer session. I would like to turn the conference back over to Erin Kane for any closing remarks.

（操作員說明）我們的問答環節到此結束。我想將會議轉回給艾琳凱恩（Erin Kane）發表閉幕詞。

Great. Thank you all again for your time and interest this morning. While there are puts and takes across our end markets and broader macro uncertainty, we have a demonstrated playbook and track record to navigate these dynamics. We'll continue to position our business for long-term sustainable performance through our smart and disciplined investments and focus on accelerating growth in the most profitable areas of our portfolio. With that, we look forward to speaking with you again next quarter. Stay safe and be well.

偉大的。再次感謝大家今天早上的時間和興趣。儘管我們的終端市場存在看跌期權和看跌期權以及更廣泛的宏觀不確定性，但我們有一個經過驗證的策略和記錄來駕馭這些動態。我們將繼續透過明智和嚴格的投資來定位我們的業務，以實現長期可持續的業績，並專注於加速我們投資組合中最有利可圖的領域的成長。因此，我們期待下個季度再次與您交談。保持安全並保持健康。

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.

會議現已結束。感謝您參加今天的演示，您現在可以斷開連接了。