DOW
Net income up 80%, sales down slightly in Q3 / Liveris says economic outlook is “stabilising”
Dow Chemical (Midland, Michigan/ USA; www.dow.com) has reported a more than 80% increase in net income from continuing operations for Q3 2009 against both the 2008 quarter and this year’s Q2. The USD 799m intake compares with USD 440m and USD 435m respectively in the two periods. Pretax income from continuing operations rose 61% to USD 1 bn. Pro forma sales (including figures for recently acquired speciality chemicals producer Rohm & Haas) slid back by 6% year-on-year to USD 12 bn.
Third-quarter EBITDA in the Performance Systems segment nearly doubled year-on-year to USD 207m from USD 106m, despite a 29% decline in sales revenue to USD 1.5 bn. Sales of Automotive Systems fell as OEMs continued to reduce production. Epoxy systems profited from strong demand for wind energy applications in China, while weakness in the construction sector dogged Dow Wire and Cable.
In the Performance Products segment, EBITDA rose to USD 438m, a 39% improvement against the 2008 quarter, which was marked by hurricane-related costs. The segment’s sales fell by 33% to USD 2.4 bn. Dow said the economic crisis led to double-digit decreases in revenues against all businesses and geographical areas. Turnover in polyurethanes declined due to lower selling prices, while volumes held steady.
Dow’s Basic Plastics segment saw EBITDA drop by almost 8% against the 2008 quarter to USD 599m. Revenue declined by 32% to USD 2.6 bn, as selling prices plummeted by 33%. PE saw double-digit volume gains in developing regions of Latin America, Asia Pacific and India, the Middle East and Africa (IMEA). Polypropylene volumes rose slightly on strong demand and tight supply in Europe. By contrast, styrenics saw double-digit price and volume declines, driven by lower raw material costs and sinking demand in automotive, appliance and construction applications.
“Despite dramatically lower” caustic soda prices and weak demand for VCM due to lagging US infrastructure spending, the Basic Chemicals segment improved its EBITDA by 5% to USD 195m. Dow said the “relative raw material cost advantage in the US Gulf Coast” enabled it to increase production for export. The segment turned in sales of USD 568m, down 49% on the 2008 quarter.
CEO Andrew Liveris said “the economic outlook for the rest of 2009 appears to be stabilising,” thanks to strong growth in emerging geographies and the “slow and tenuous recovery” in Dow’s US home market. He said the group has benefited from the “decisive actions we took to accelerate our restructuring efforts and cost synergies.” Structural cost reductions over the past year are ahead of management’s goal of more than USD 1 bn, and Dow has also achieved “more than 110% of the 12-month cost synergy run-rate goal for the integration of Rohm & Haas, begun six months ago.”
e-Service:
Comprehensive Dow Chemical report on Q3 2009, including tables and charts, as a PDF document (399 KB)
Third-quarter EBITDA in the Performance Systems segment nearly doubled year-on-year to USD 207m from USD 106m, despite a 29% decline in sales revenue to USD 1.5 bn. Sales of Automotive Systems fell as OEMs continued to reduce production. Epoxy systems profited from strong demand for wind energy applications in China, while weakness in the construction sector dogged Dow Wire and Cable.
In the Performance Products segment, EBITDA rose to USD 438m, a 39% improvement against the 2008 quarter, which was marked by hurricane-related costs. The segment’s sales fell by 33% to USD 2.4 bn. Dow said the economic crisis led to double-digit decreases in revenues against all businesses and geographical areas. Turnover in polyurethanes declined due to lower selling prices, while volumes held steady.
Dow’s Basic Plastics segment saw EBITDA drop by almost 8% against the 2008 quarter to USD 599m. Revenue declined by 32% to USD 2.6 bn, as selling prices plummeted by 33%. PE saw double-digit volume gains in developing regions of Latin America, Asia Pacific and India, the Middle East and Africa (IMEA). Polypropylene volumes rose slightly on strong demand and tight supply in Europe. By contrast, styrenics saw double-digit price and volume declines, driven by lower raw material costs and sinking demand in automotive, appliance and construction applications.
“Despite dramatically lower” caustic soda prices and weak demand for VCM due to lagging US infrastructure spending, the Basic Chemicals segment improved its EBITDA by 5% to USD 195m. Dow said the “relative raw material cost advantage in the US Gulf Coast” enabled it to increase production for export. The segment turned in sales of USD 568m, down 49% on the 2008 quarter.
CEO Andrew Liveris said “the economic outlook for the rest of 2009 appears to be stabilising,” thanks to strong growth in emerging geographies and the “slow and tenuous recovery” in Dow’s US home market. He said the group has benefited from the “decisive actions we took to accelerate our restructuring efforts and cost synergies.” Structural cost reductions over the past year are ahead of management’s goal of more than USD 1 bn, and Dow has also achieved “more than 110% of the 12-month cost synergy run-rate goal for the integration of Rohm & Haas, begun six months ago.”
e-Service:
Comprehensive Dow Chemical report on Q3 2009, including tables and charts, as a PDF document (399 KB)
28.10.2009 Plasteurope.com [214700]
Published on 28.10.2009