24 July 2008 12:22 [Source: ICIS news]
LONDON (ICIS news)--Second-quarter net profits for Dow Chemical plunged 26.7% to $762m from $1.04bn on surging hydrocarbon and energy costs, the US chemical company said on Thursday.
Earnings per share for the quarter were $0.81 from $1.07.
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Dow lifted sales 23.5% to $16.38bn and implemented emergency measures to stave off the worst impacts of rapidly rising costs.
Double-digit price increases were recorded in all operating segments and geographic areas, it said. Sales volumes were 5% higher with 12% growth outside North America and an 11% volume increase in
“The surge in oil prices from first to second quarter added another $1bn of cost sequentially, and we reacted quickly by announcing two broad-based price increase initiatives, adjusting plant operating rates and implementing additional cost-cutting measures,” said CEO Andrew Liveris.
"The fast implementation of these price increases limited margin compression over our hydrocarbon and energy costs to approximately $130m in the quarter. This is a remarkable performance when you consider that this is only 1-2% of our total quarterly hydrocarbon and energy costs.
“These short-term actions, in addition to key elements of Dow’s strategy, such as our large global footprint, our investments in the performance businesses and our asset-light ventures, enabled us to weather unparalleled increases in hydrocarbons, supply chain and other costs,” Liveris added.
Operating profits from Dow’s agriculture businesses were 61.1% higher at $335m from $208m but profits were down in its performance chemicals and performance plastics reporting segments.
Operating profit from the basic plastics businesses was down 26.7% at $388m while basic chemicals profit slumped to $29m from $165m.
“We believe the
“Despite this, our results have demonstrated that our strategy for diversification on a global and end-use market basis has allowed us to manage through these challenging times,” he added.
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