26 July 2012 12:48 [Source: ICIS news]
LONDON (ICIS)--Dow Chemical’s second-quarter 2012 net profit fell by 31.2% to $734m (€602m) on volatile economic conditions and customer de-stocking throughout most value chains, the US company said on Thursday.
Earnings from its plastics and materials businesses were down sharply.
Sales were down 9.6% at €14.51bn with volumes down 5%, but up in Dow’s agriculture businesses, in the performance plastics segment and geographically in Asia-Pacific.
Dow said its sales in Europe were down 10%, driven by adverse currency conditions which cost the firm more than $400m.
Prices in the quarter were down 5% overall and down 8% in Europe, while purchased feedstock and energy costs were $1bn lower.
Dow said its operating rate at 78% was down six percentage points in the quarter compared with the year-earlier period due to soft demand and a high number of planned turnarounds. The plant turnarounds cut the second-quarter 2012 operating rate by 3 percentage points, Dow said.
Dow’s second-quarter earnings before interest, tax depreciation and amortisation (EBITDA) were nearly €2bn, the company said. Its electronic and Functional Materials segment earnings at this level were flat while Agricultural Sciences earnings were up 7.0%.
Coatings and Infrastructure Solutions EBITDA, however, were down 8.4%; Performance Materials EBITDA down 27.2% and Performance Plastics EBITDA down 20.7%
“Sustained uncertainty in the world economy continues to present a challenging operating environment, and this quarter was no exception,” Dow CEO Andrew Liveris said.
“Entering the second half of 2012, the global macro environment is not improving at the rate previously anticipated, and we have structured our business plans accordingly.
“We have all of our pre-stated levers in place and are driving a full array of efficiency and cost reduction measures – tightly managing operations to generate cash flow improvements.”
($1 = €0.82)
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