LONDON (ICIS)--Fourth-quarter chemical earnings in Occidental Petroleum’s OxyChem business fell 29% year on year to $128m on higher energy and ethylene costs and lower caustic soda prices, the US-based energy and chemicals firm said on Thursday.
New chlor-alkali capacity resulted in a significant increase in competitive activity in the fourth quarter, causing price pressure, the company added.
Segment net sales in the fourth quarter were largely stable year on year at $1.1bn.
For the 12 months of 2013, chemical core earnings were $612m compared with $720m in 2012, primarily because of “higher energy costs, higher ethylene costs and lower chlor-alkali and chlorinated organics pricing driven by continued unfavourable supply/demand fundamentals and reduced export demand”, Occidental said.
Full-year 2013 chemical segment net sales rose slightly to $4.7bn from $4.6bn the year before.
Overall, California-based Occidental announced a fourth-quarter net income of $1.6bn, a sharp rise compared with $336m in the same period the year before, as net sales held steady year on year at $6.17bn.
The company said the 2013 fourth quarter includes an after-tax gain of $665m from the sale of a portion of an investment in the General Partner of Plains All American Pipeline and an after-tax charge of $395m related to the impairment of certain non-producing domestic oil and gas acreage.
Net income for 2013 was $5.9bn compared with $4.6bn reported in 2012, Occidental added, as net sales rose slightly to $24.5bn from $24.2bn the year before.