Dow's Q1 net profit rises to $552m on strong volumes, price gains

28 April 2010 12:17  [Source: ICIS news]

Dow headquartersLONDON (ICIS news)--Dow Chemical's net profit reached $552m (€420m) in the first quarter, compared with $35m in the same period of last year, on stronger volumes and price gains, the US producer said on Wednesday.

Reported sales rose 48% to $13.4bn and were up 33% on a pro forma basis that takes into account divestments. Dow said gains were made in all geographic areas, with a 27% improvement in North America and a 35% sales increase in the Europe, Middle East and Africa region.

Overall, volumes were up 16% and prices were up 17% year on year. China volumes were up 46%.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA), on a pro forma basis, of $1.8bn were up $877m from the same period last year and up $356m from the fourth quarter of 2009, Dow said. Equity earnings of $304m were up $200m year on year.

“The earnings power of Dow’s new portfolio was evident this quarter with our robust sales growth driven by significant volume and price increases in all geographic areas, with notable improvements in North America and Europe,” CEO Andrew Liveris said.

“When combined with broad-based EBITDA margin expansion and record equity earnings, this enabled us to achieve greatly improved operating results.”

Dow said its operating rate in the latest quarter was 83%, up 7 percentage points on a sequential quarter-to-quarter basis.

Liveris said demand growth was returning in developed markets, with strengthened consumer spending in areas such as electronics, appliances and automotive.

That spending was balancing out challenges in residential and commercial construction, inflation in emerging markets and sovereign debt issues in southern Europe, he said.

"Overall, the global economic environment is on a stronger footing and there are signs that this will continue for the foreseeable future,” he added.

($1 = €0.76)

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By: Nigel Davis
+44 20 8652 3214



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