US Westlake Q4 net income surges to $84.1m on higher margins

22 February 2011 12:28  [Source: ICIS news]

LONDON (ICIS)--Westlake’s fourth-quarter net income in 2010 surged to $84.1m (€62.2m), compared with $12.5m in the same period a year before, as its business segments saw higher margins and strong demand, the US polyethylene (PE) and vinyls producer said on Tuesday.

Sales for the three months ending on 31 December 2010 increased 26% year on year to $795.4m, primarily due to higher sales prices for all of the group’s major products and higher sales volumes for polyvinyl chloride (PVC) resin and caustic soda, the company said.

"We achieved significant improvement in earnings in 2010 in spite of the slow recovery in the broader economy and continued weakness in the US construction markets,” said Westlake president and CEO Albert Chao.

Income from operations soared to $137.1m in the fourth quarter of 2010 compared with $23.0m in the same quarter the year before, as Westlake’s olefins segment benefited from higher integrated product margins, primarily as a result of higher sales prices driven by strong domestic and export demand for PE and relatively flat ethane feedstock costs, the company said.

Income from operations for Westlake's olefins segment increased to $154.5m in the fourth quarter of 2010, from $55.1m in the same period of 2009.

“Olefins segment margins showed steady improvement during 2010 driven largely by strong demand for polyethylene, low-cost natural gas-based ethylene production and high operating rates,” Chao said.

In addition, the group’s vinyls sales volumes and operating rates improved compared with the same quarter in 2009, largely as a result of robust export demand for PVC resin, Westlake said.

The company's vinyls segment reported a loss from operations of $12.4m in the fourth quarter of 2010, compared with a loss of $29.2m in the same period a year before.

“In the vinyls segment, PVC resin operating rates improved in 2010 due to increased exports driven largely by more competitive ethylene and energy cost positions in North America. As a part of our vinyls integration strategy, in 2010 we began construction of a chlor-alkali unit in Geismar, Louisiana, which is expected to be completed in 2013,” Chao added.

For the full year ending on 31 December 2010, Westlake reported a net income of $221.4m, compared with a 2009 net income of $53.0m, while net sales for 2010 grew by 36% year on year to $3.17bn, due to higher sales prices for most of its major products and higher sales volume for PE and PVC resin, Westlake said.

($1 = €0.74)

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By: Franco Capaldo
+44 (0)20 8652 3214



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