02 February 2010 13:01 [Source: ICIS news]
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LONDON (ICIS news)--Dow Chemical swung to a fourth-quarter net profit of $87m (€63m) from the $1.55bn loss reported in the same quarter of last year, largely on year-on-year volume gains across almost all operating segments and on stronger equity earnings, the US producer said on Tuesday.
On an ongoing business basis, the fourth-quarter 2009 net result was $178m, the company said.
Sequential fourth-quarter volumes sales were lower, however, in ?xml:namespace>
Emerging market volumes were up 33% and equity earnings returned to a level not seen since the economic downturn, CEO Andrew Liveris said.
Sales in the quarter were 15% higher year on year at $12.5bn.
On a pro forma basis, excluding completed divestments, sales were up 4% year on year. Dow has been forced to sell off a number of businesses to help it pay down the debt accrued when it bought specialty materials maker Rohm and Haas.
On a pro forma basis sequentially, Dow said its sales rose 8%, with volumes up 3% and prices up 5%.
Dow’s pro forma earnings before interest, tax, depreciation and amortisation (EBITDA), excluding some charges and gains, were up $809m year on year, with profits from the performance segment businesses up more than 85%.
Net income for the full year was $566m from continuing operations, compared with the 2008 figure of $626m. As reported, net income was down 42% at $336m. Full-year 2009 sales were down 22% at $44.9bn.
“We see demand in emerging geographies continuing to show sustained growth, which bodes well for global growth,” Liveris said in the company’s earnings statement. “Growth will continue to lag in the
Sales grew strongly in the quarter on a sequential basis for the basic chemicals and polymers businesses and in health & agriculture. The more specialised businesses largely benefited from stronger demand.
Dow said its global operating rate in the fourth quarter was 76%, 12 percentage points higher than in the year earlier period but 2 percentage points down on the third quarter 2009 rate. Seasonal patterns in the 2009 fourth quarter were offset by increased production in the basic chemicals businesses, it said.
Dow said is divestment programme had helped it reduce its net debt to total capitalisation ratio to 48%. It had repaid a bridging loan taken on its acquisition of Rohm and Haas and repaid the outstanding balance of its revolving credit facility.
Cutbacks had helped reduce costs by $1.2bn for the year, well ahead of the restructuring run-rate goal for the integration of Rohm and Haas, it said.
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