US hurricane's path of destruction affected Q4 earnings - Olin CEO

29 January 2013 18:22  [Source: ICIS news]

HOUSTON (ICIS)--Hurricane Sandy as well as low water levels in the Mississippi river caused disruptions in logistical chains that affected the Q4 earnings of US chlor-alkali producer Olin, company officials said on Tuesday.

The exact amount of the impact of the so-called “super-storm” that hit the east coast in October has not been quantified, CEO and President Joseph Rupp told analysts during a conference call to discuss the company’s Q4 earnings.

After the market closed on Monday, Olin reported its Q4 net income was $34.6m (€25.6m), compared to $18.7m in the last quarter of 2011. Sales in Q4 2012 were $597.6m, compared to $445.8m in Q4 2011, the company said.

The company said its Q4 results included pretax restructuring charges of $2.5m that were primarily associated with the conversion of its chlor-alkali plant in Charleston, Tennessee, from mercury cell to membrane technology and the ongoing relocation of its Winchester centerfire ammunition manufacturing operations from Illinois to Mississippi.

The Q4 results also included a $4.9m insurance recovery related to an unplanned chlor-alkali customer outage in the first and second quarters of 2012 and a $3.0m favourable settlement of a property tax dispute.

Chlor-alkali sales for Q4 2012 were $323.1m, slightly down from the $323.3m reported for the same period a year earlier, the company said. Chlorine and caustic soda volumes increased 1% over Q4 2011, potassium hydroxide volumes increased 18% and bleach volumes increased 20%. Hydrochloric acid volumes declined 7%.

Q4 2012 chlor-alkali segment earnings were $54.3m, compared to $50.3m earned in the same period of 2011. Olin attributed the increase to improved volumes and lower costs.

During Tuesday’s conference call, Rupp responded to query about the impact of Hurricane Sandy disruptions on Olin’s sales. Rupp said Olin and other chlor-alkali producers were forced to ship material by rail to terminals that did not support shipments by barge, which had an impact on sales. But he said the full impact had not been quantified.

Similarly, Rupp said that record low-water levels in the Mississippi river system in the latter part of 2012 had a significant effect. But efforts by the U.S. Army Corps of Engineers and other measures to improve water levels on the river have largely been successful, Rupp told analysts.

($1 = €0.74)

Follow Ken Fountain (@ICIS_Ken) on Twitter.


By: Ken Fountain



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