Dow Chemical Q4 net profit more than doubles to $513m

03 February 2011 13:01  [Source: ICIS news]

The Dow Chemical facility at Freeport TexasLONDON (ICIS)--Dow Chemical’s 2010 fourth-quarter net profit surged to $513m (€369m), up from $178m in the same period in 2009, as margins improved for plastics, performance products and performance systems, the US chemical company said on Thursday.

Excluding special items, the net result more than doubled to $625m from $286m in the fourth quarter of 2009 but was down from the $705m reported for underlying net profit from continuing business in the third quarter.

Fourth-quarter sales were up 10.5% year on year at $13.8bn, with double-digit increases in all geographic areas and in all, apart from coatings and infrastructure, where the gain was 6%, Dow Chemical said. Excluding divestments, the sales gain was 22%, it added.

Sequentially, sales rose 7% in all geographic areas in the fourth quarter on 3% higher volumes and 4% higher prices. Volume gains of 8% and 6% were seen in Asia and Latin America.

At the operating level, fourth-quarter earnings before interest, tax, deprecation and amortisation (EBITDA) were $1.9bn, up 30% from the same period in 2009, with plastics and chemicals profits up sharply.

Plastics EBITDA margins improved by 520 basis points from the 2009 third quarter. Performance products and performance systems margins were more than 230 basis points higher.

“This was a strong quarter for Dow and marked another significant milestone for our company as we continued to deliver earnings growth,” Dow CEO Andrew Liveris said.

“We delivered record sales for both the quarter and the year in emerging markets, while our leadership positions in North America and Europe enabled us to capitalise on the economic recovery that appears to be gaining traction in those economies,” he added.

Dow reported a full-year net profit of $2.32bn, up significantly from $676m in 2009. Sales for the year were up 20% at $53.7bn and were 26% higher when excluding divestments.

“Dow is well-positioned for the improving economic climate and will continue to benefit from growth in high-margin sectors, such as electronics and packaging, driven by innovative products and technologies, coupled with our expanding presence in emerging markets,” Liveris added.

“Looking ahead, we expect growth will continue, driven by a broad range of leading end-markets in emerging geographies such as China, India, eastern Europe and Brazil. Signs of improvement in industrial and B2B markets in North America and Europe give us optimism that we will see continued growth in these developed markets.

“Overall, the world continues to recover to pre-recession levels. However, with inflation concerns in emerging geographies, lingering unemployment issues in the US and sovereign debt issues in Europe, we remain prepared for a reversal in momentum,” Liveris said.

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By: Nigel Davis
+44 20 8652 3214



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