04 December 2008 17:25 [Source: ICIS news]
(adds updates throughout)
However, unlike other producers, DuPont was committed to maintaining dividends and return excess cash to shareholders, the executives said in a webcast conference call.
DuPont expected to have free cash flow of $2.5bn (€2bn) in 2009, exceeding the 2008 level by over $1bn, as it was cutting net working capital and reducing capital spending, they said.
“Our immediate actions are focused on customers, costs and working capital improvements, all in a way that maximises cash," said president Ellen Kullman.“Right now we are focussing on the next 16 weeks, and clearly cash is our priority,” Kullman, who is due to take over as CEO from Charles Holliday on 1 January, said.
The company was stopping all discretionary spending, seeking reductions in raw material costs, and it was slowing or stopping projects that were not absolutely critical, she said.
In addition, DuPont was monitoring inventories very closely to make sure they were in line with the current demand outlook “and nothing more,” she said.
Production had already been curtailed with over 100 plants temporarily idled, Kullman said.
Earlier on Thursday, DuPont announced 2,500 jobs cuts as part of a restructuring to compensate for a loss of automobile and housing market business.
Commenting on additional employment reductions, Kullman said by the end of December DuPont would dismiss about 4,000 contractors and further cuts were likely in 2009.
Of the 4,000 contracting positions, about one third would be replaced with DuPont staff, she added.
One bright spot even in the current tough environment was DuPont’s agricultural business which was expected to continue to perform strongly next year, she said.
DuPont’s biofuels platform would benefit from governments’ stimulus measures to revive economies, DuPont executives said.
The drop in oil prices would likely be only temporary and was not likely to hurt the company’s biofuels activities, they said.
Shares of DuPont on the New York Stock Exchange were trading on Thursday morning at $23.87, up 26 cents.
($1 = €0.79)For more on DuPont visit ICIS company intelligence
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