Dow's Q4 net profit down 52% on restructuring

29 January 2008 12:30  [Source: ICIS news]

DowLONDON (ICIS news)--Dow Chemical's fourth-quarter net income was 52% down year on year at $472m (€321m), reflecting $334m in net after-tax charges related to restructuring and acquisitions, the US chemicals major said on Tuesday.

 

Group sales were reported at $14.2bn, an increase of 16% on the year-earlier period, setting a new quarterly record for the company.

 

Dow’s fourth-quarter earnings before interest and tax (EBIT) were down 57% at $602m.

 

“This was a good quarter… a quarter in which our entire organisation responded with speed and discipline to an unprecedented run-up in feedstock and energy costs, raising price to mitigate much of the $1.7bn year-over-year increase,” said CEO Andrew Liveris.

 

“And our focus on price did not come at the expense of volume. Volume gains were reported in all operating segments, a testament to our price/volume management capabilities,” he added.

 

Year on year, the company’s fourth quarter sales volume was up 4%, while prices were up 12% with increases in all operating segments, said Dow.

 

For the full year, Dow’s net income was down to $2.89bn from $3.72bn, while sales increased 9% to $53.51bn.

 

“For 2008, there is some uncertainty in the economic outlook for the US,” said Liveris. “With two-thirds of our sales outside the US, our global footprint will allow us to continue to capture growth in key regions of the world, such as Brazil, eastern Europe/Russia, India and China.”

 

“In addition, as we continue to implement our strategy, our focus will be on financial discipline and price/volume management which, coupled with the strong performance of our joint ventures, is expected to bring another solid year of earnings for Dow,” he added.

 

By business segment, performance plastics’ fourth-quarter EBIT was down 54% at $158m including restructuring charges of $184m. Sales increased 12% to $3.97bn with gains in every area outside North America.

 

Performance chemicals reported an EBIT of $124m, 58% down on the year-earlier period accounting for restructuring charges of $85m. Sales rose 6% in the segment to $2.13bn with prices up in all geographical areas and businesses.

 

Agricultural sciences posted a fourth-quarter EBIT at a loss of $38m compared with a gain of $38m in the year-earlier period, which included restructuring charges of $77m. Sales were up 6% to $864m.

 

Basic plastics’ EBIT dropped 15% to $394m including $88m in restructuring charges. Sales were up 18% at $3.49bn driven by a 17% price increase.

 

Dow’s basic chemicals segment increased EBIT by 59% to $309m including a $7m restructuring charge. Sales were up 24% to $1.63bn driven by price increases of 19%.

 


By: Mark Watts
+44 20 8652 3214



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