US Westlake's Q3 net income up 28% on low feedstock, energy costs

08 November 2012 11:51  [Source: ICIS news]

US WestlakeLONDON (ICIS)--Westlake Chemical’s third-quarter net income rose by 28.0% year on year despite lower sales revenues as the US producer benefited from lower feedstock and energy costs, it said on Thursday.

The company’s net income for the three months ended September 30 was $87.0m (€67.9m), or $1.30 per diluted share.

Sales declined by 15.5% from the same period a year ago to $821.2m, mostly due to lower prices for the majority of the firm’s major products and lower sales volumes for styrene, Westlake said.

This was partially offset, however, by higher polyethylene (PE), ethylene, polyvinyl chloride (PVC) resin and building products sales volumes.

Operating income increased by 21.5% to $142.5m year on year on improved olefins and vinyls integrated product margins. This was primarily due to lower feedstock and energy costs, higher PE and vinyls sales volumes and higher operating rates, Westlake said.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose to $175.6m from $151.6m in the year-before period.

Westlake said its income before taxes for the quarter was impacted by $17.6m relating to debt refinancing costs ($7.1m) and unabsorbed manufacturing costs associated with a planned outage of its styrene plant in Lake Charles, Louisiana ($10.5m).

"We are pleased to report our strongest third quarter in the company's history, driven by strong demand for ethylene derivatives and low feedstock costs,” said President and CEO Albert Chao.

“We are continuing to make progress on our previously announced expansions that should grow our bottom line and allow us to capitalise on the low cost ethane feedstock and energy costs that shale gas is providing,” Chao added.

($1 = €0.78)  

By: Graeme Paterson
+44 20 8652 3214

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