30 July 2009 13:18 [Source: ICIS news]
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LONDON (ICIS news)--Dow Chemical reported a net loss of $435m for the second quarter on continued weak business and charges related to its acquisition of Rohm and Haas, but said sales volumes had increased sequentially for the first time since the second quarter of 2008.
In the second quarter of 2008, the company reported a net profit of $776m.
The quarterly loss of $0.47 a share in the latest quarter compared with earnings of $0.81 a share in the equivalent quarter of 2008 and the $0.03 earned in the first quarter of this year.
Stripping out charges related to the acquisition of specialty and materials maker Rohm and Haas and to restructuring, the company said it earned $0.05 a share in the latest quarter. Its equivalent earnings in the first quarter were $0.11 a share.
Net sales for the latest quarter were down 31% year on year at $11.3bn. Dow said that volumes in the second quarter were down 20% on a pro forma basis but improved 5% compared with the first quarter of 2009, marking the first sequential gain since the second quarter of 2008.
The company’s global operating rate improved seven percentage points to 75% from the prior quarter, driven by double-digit volume growth compared with pro forma sales in Asia Pacific, ?xml:namespace>
Earnings before interest, tax, depreciation and amortisation (EBITDA) excluding certain charges and gains improved sequentially 64% on a pro forma basis, Dow said, driven by increases in its advanced materials and performance products and systems business segments.
Basic plastics earnings also improved, while earnings from agriculture were down sequentially due to declines for agricultural chemicals.
Year-on-year EBITDA were down 71% at $596m, with basic chemicals reporting a loss of $107m for the period and basic plastics earnings down 31% at $405m.
Dow also said on Thursday that it had agreed the sale of its stakes in the Optimal olefins, glycols and chemicals joint ventures to
The company said that it had created an operating unit comprising its styrenics and aromatics businesses to streamline operations and prepare the unit for sale.
Dow achieved improved financial performance and successfully reached a number of significant transformational milestones in the second quarter inclusive of the announced Optimal divestment, CEO Andrew Liveris said.
“Business results improved sequentially, reflecting volume growth, our ability to hold price in the quarter as well as acceleration and realisation of our cost reductions and synergies,” he added.
The Optimal divestment, alongside others announced this year, the issuance of new debt and equity and the elimination of preferred securities placed the company ahead of its financial milestones, including the pay down of the bridging loan utilised to acquire Rohm and Haas, Dow said.
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