Agriculture division turnaround buoys DuPont Q4 income growth

28 January 2014 14:17 Source:ICIS News

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LONDON (ICIS)--US-based chemicals producer DuPont said on Tuesday that its fourth-quarter 2013 income had increased by 99% year on year, driven in part by a reversal of fortunes for its agriculture division.

The company posted net income of $185m for the quarter compared to $93m during the same period in 2012, driven by double-digit earnings increases, in spite of performance chemicals, which was weighed down by titanium dioxide (Ti02) price falls.

Stronger volume growth and operating margins and a lower tax base also helped to drive the improved results, the company added.

Agriculture division operating earnings rebounded from a $77m loss in the fourth quarter of 2012 to an $88m gain during the same quarter in 2013, driven by strong Latin American sales and earlier direct shipments across the Americas.

Group fourth-quarter sales grew by 6% year on year to $7.7bn during the quarter, with volume growth increasing by 9% over the same period due to increased demand across all segments and regions.

“The improvement was driven by higher volumes, new innovative products and productivity gains,” DuPont CEO Ellen Kullman said.

“Our 2013 results and strategic actions demonstrate we are advancing our plan to build a higher growth, higher value DuPont and reinforce our decision to separate Performance Chemicals into a strong, independent company,” she added, attributing the improved performance in part to “a gradually improving global economy”.

Performance Chemicals operating earnings fell by 3% over the same period to $229m due to lower TiO2 and refrigerants pricing and higher raw materials costs, which collectively wiped out volume increases and improved plant utilisation in both businesses. The division is to be spun off in the second quarter of 2015.

The company’s electronics and communications division operating earnings more than doubled to $93m on the back of improving photovoltaic market demand, higher sales volumes and improved plant utilisation.

Industrial biosciences earnings were stable year on year at $40m during the quarter as increased demand for polymers for carpeting and enzymes for ethanol production was offset by higher costs.

Nutrition and health division earnings grew 40% to $81m during the quarter, driven by increased demand for protein solutions, probiotics and cultures, as well as strengthening operating margins.

Performance Materials operating earnings were up 8% to $295m for the quarter on the back of improved demand from the packaging, automotive and industrial markets, while safety and protection fourth-quarter earnings were up 57% to $209m due to higher volumes and productivity.

Full-year net income for 2013 was $4.86bn on sales of $35.73bn, compared to $2.78bn on sales of $34.81bn in 2012.

The company predicted that improved earnings will continue into this year, forecasting its full-year 2014 operating earnings in the $4.20-$4.45 per share range, an 8-15% increase on full-year 2013 levels.

By Tom Brown