28 January 2014 16:10 [Source: ICIS news]
HOUSTON (ICIS)--DuPont expects earnings in its chemicals segment to be down significantly year over year in the current first quarter 201 because of lower titanium dioxide (TiO2) and fluoropolymer prices, executives for the US-based producer said on Tuesday.
However, for the full 12 months of 2014, DuPont forecasts the segment's earnings will be up modestly on higher volumes, CEO Ellen Kullman and chief financial officer Nicholas Fanandakis told analysts during the company’s fourth-quarter 2013 earnings call.
DuPont's performance chemicals business includes TiO2, fluoropolymers, refrigerants and surfacing materials.
Kullman said that going forward, trends in the performance chemicals business are "clearly positive".
But she would not say whether DuPont expects to see an increase in TiO2 prices later this year.
"I think [prices increases are] going to depend on how strong the economy is and what kind of growth we see," she said.
Meanwhile, DuPont sees TiO2 customer inventory levels as "normal" while producer inventory levels remain essentially unchanged from the third quarter, the executives said.
In Q4 2013, chemical segment operating earnings were down 3% year over year to $229m, as price declines for TiO2 and refrigerants, along with higher raw material costs, more than offset volume increases and improved plant utilisation.
However, the segment’s profit decline slowed sharply, compared with a 56% year-over-year decline in the first six months of 2013 and a 38% year-over-year decline in the third quarter.
TiO2 volumes were up 18% from Q4 2012, marking four consecutive quarters of year-over-year volume growth.
DuPont’s full-year performance chemicals segment profit was down 45% year over year to $998m. However, full-year volumes for Ti02 were up 14% from 2012 "in a modestly recovering market", the executives said.
Kullman also confirmed that DuPont remains on track to separate the performance chemicals business in Q2 2015. The business will be run as an independent, publicly traded company. DuPont already appointed a CEO to run that business.
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