WESTLAKE
US resin maker with record results / Acquisitions, high prices provide impetus
 Post Oak Boulevard 2801, Houston: location of the US corporation's headquarters (Photo: Westlake) |
Acquisitions and high prices for polyethylene and PVC have helped Westlake (Houston, Texas, USA; www.westlake.com) to record results across the board: turnover, operating profit, and net profit were higher in the second quarter of 2022 than in any other three-month period.
On the one hand, the plastics producer reaped the fruits of its purchases, in particular the acquisition of Hexion’s epoxy resins business (see Plasteurope.com of 07.12.2021), as well as the takeover of the North America PVC activities of Australian building materials group Boral (see Plasteurope.com of 23.06.2021). On the other hand, the US group benefited from an economic environment where prices for PE and PVC climbed to new highs in April. Westlake described this understatedly as “solid market conditions due to strong demand and pricing dynamics”. As a result, revenues soared 57% year-on-year to USD 4.48 bn (EUR 4.4 bn) in the three months through June 2022, with EBITDA up 56% to USD 1.46 bn and net income surging 64% to USD 858 mn.
The increases are even more striking when looking at the half-year figures, as Q1 2021 had still been heavily battered by the pandemic. Turnover climbed 64% to USD 8.54 bn, and EBITDA surged 86% to USD 2.76 bn. At USD 2.21 bn, net profit was over twice as high as a year earlier.
Related: Another explosion during maintenance work at Westlake's Lake Charles / Six workers hurt
The same is also reflected in the group’s segments: the raw materials division, Performance & Essential Materials, with its PE and PVC production units, increased half-year sales by 53% to USD 5.94 bn and EBITDA by 71% to USD 2.23 bn. The processing segment, Housing and Infrastructure Products, with its home construction products such as pipes and compounds, almost doubled sales to USD 2.6 bn, while EBITDA reached USD 568 mn, almost two-and-a-half times the previous year’s value.
President and CEO Albert Chao expressed confidence in the future of his group. However, “geopolitical and economic factors could affect the business”, he said. The development of poylmer prices is already showing a clear loss of momentum: since the highs in April, prices for both PE and PVC have been falling (see PIE’s polymer price reports of 02.08.2022 and 03.08.2022).
On the one hand, the plastics producer reaped the fruits of its purchases, in particular the acquisition of Hexion’s epoxy resins business (see Plasteurope.com of 07.12.2021), as well as the takeover of the North America PVC activities of Australian building materials group Boral (see Plasteurope.com of 23.06.2021). On the other hand, the US group benefited from an economic environment where prices for PE and PVC climbed to new highs in April. Westlake described this understatedly as “solid market conditions due to strong demand and pricing dynamics”. As a result, revenues soared 57% year-on-year to USD 4.48 bn (EUR 4.4 bn) in the three months through June 2022, with EBITDA up 56% to USD 1.46 bn and net income surging 64% to USD 858 mn.
The increases are even more striking when looking at the half-year figures, as Q1 2021 had still been heavily battered by the pandemic. Turnover climbed 64% to USD 8.54 bn, and EBITDA surged 86% to USD 2.76 bn. At USD 2.21 bn, net profit was over twice as high as a year earlier.
Related: Another explosion during maintenance work at Westlake's Lake Charles / Six workers hurt
The same is also reflected in the group’s segments: the raw materials division, Performance & Essential Materials, with its PE and PVC production units, increased half-year sales by 53% to USD 5.94 bn and EBITDA by 71% to USD 2.23 bn. The processing segment, Housing and Infrastructure Products, with its home construction products such as pipes and compounds, almost doubled sales to USD 2.6 bn, while EBITDA reached USD 568 mn, almost two-and-a-half times the previous year’s value.
President and CEO Albert Chao expressed confidence in the future of his group. However, “geopolitical and economic factors could affect the business”, he said. The development of poylmer prices is already showing a clear loss of momentum: since the highs in April, prices for both PE and PVC have been falling (see PIE’s polymer price reports of 02.08.2022 and 03.08.2022).
10.08.2022 Plasteurope.com [250948-0]
Published on 10.08.2022
German version of this article...