US Westlake's Q2 net income up 43% on lower-cost feedstock

02 August 2012 12:00  [Source: ICIS news]

LONDON (ICIS)--Westlake Chemical’s second-quarter net income rose by 43% year on year to $115.5m (€94.7m), as the company’s olefins and vinyls segments benefited from lower-cost feedstocks, the US producer said on Thursday.

Net income was also boosted by $8.5m as a result of a $16m pre-tax gain from the sale of securities in Georgia Gulf, which it unsuccessfully tried to acquire at the beginning of the year.

Sales in the second quarter fell by 1.2% year on year to $914.0m, primarily because of lower sales prices for most of its major products and lower sales volume for polyvinyl chloride (PVC) resin and building products.

This was partially offset, however, by higher olefins and feedstock sales volumes, Westlake said.

Operating income increased by 24% year on year to $171.0m on lower feedstock and energy costs, improved building products margins and higher caustic sales volumes.

“Our olefins and vinyls segments both benefited from lower cost feedstocks in the second quarter, as ethane and propane decreased to their lowest prices in years as a result of ample supply made possible by shale gas production," said president and CEO Albert Chao.

“We believe North American shale gas production will continue to give our business a significant cost advantage as a result of low cost energy and natural gas liquids based ethylene feedstock,” he added.

Chao said Westlake’s integration strategy includes plans to expand its ethylene units and add chlor-alkali capacity.

($1 = €0.82)

By: Graeme Paterson
+44 20 8652 3214

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