US Dow Chemical underlying profit down as net falls 27.8% to $520m

LONDON (ICIS)–Dow Chemical’s first quarter net income fell 27.8% to $520m ($395m) on weaker operating earnings and a restructuring charge, the US-headquartered chemicals major said on Thursday.

The company recorded a pre-tax restructuring charge of $357m in the quarter. Earnings before interest, tax, depreciation and amortisation (EBITDA) from the Dow businesses, excluding restructuring and other charges and gains, were down 14.6% at $2.09bn.

Dow’s sales for the quarter were flat compared with the year earlier period at $14.72bn.

Sales volumes in the company’s agricultural businesses were up 12%. Overall sales volumes were down 1% and prices up 1%. Dow said its operating rate in the quarter was 84%, 1 percentage point higher than a year ago but 12 points higher than in the fourth quarter of 2011.

On an adjusted, geographic basis, volume gains in Europe, Middle East and Africa (EMEA) of 7% and a 2% volume gain in North America were more than offset by declines in Latin America and Asia Pacific, Dow said.

Chairman and chief executive, Andrew Liveris said demand had been slow early in the quarter but the company had captured demand gains in the US and Germany and posted its 10th consecutive quarter of volume increases in rapidly growing emerging economies.

“We exited the quarter with momentum, and looking forward we remain resolutely focused on our strategic priorities,” he said.

“The pace of global recovery continues to be consistent with our previous outlook,” he added.

“We are benefiting from strong fundamentals in a number of resilient markets, including agriculture, food and industrials. Further, we are encouraged by signs of improvement in construction, electronics and transportation,” Liveris said 

“We anticipate that global growth will gain momentum as we move through the second quarter and into the remainder of the year.”

($1 = €0.76)