US Westlake Chemical’s Q4 net income up 7.2% on higher sales

LONDON (ICIS)–Westlake Chemical Corporation’s net income for the fourth quarter rose to $183.3m, up 7.2% year on year from $171.0m in the same quarter of 2013, on higher net sales, the US-headquartered producer said on Tuesday.

The company added that its net income was negatively impacted by $4.4m as a result of an impairment of an equity investment.

Net sales for the three months ended 31 December 2014 of $1.14bn rose $184.3m year on year, primarily due to sales attributable to the acquisition of polyvinyl chloride (PVC) resin business Vinnolit Holdings in the third quarter of 2014.

Sales were partially offset by lower styrene and ethylene co-products sales volumes, Westlake Chemical added.

The group’s income from operations stood at $302.4m in the fourth quarter compared with $257.6m in the same period in 2013, primarily due to higher integrated vinyls margins, largely because of “lower feedstock costs resulting from the expansion and conversion of its Calvert City, Kentucky ethylene plant from propane to ethane feedstock.”

For the whole year, net income in 2014 was $678.5m, representing an increase of $68.1m from 2013 net income.

The company said net income was negatively impacted by costs aggregating to approximately $26.0m related to Westlake Partners’ initial public offering and the Vinnolit acquisition, and the non-recurring state tax items which increased the 2014 tax provision by $14.8m.

Net sales of $4.42bn in 2014 represents a rise from $3.76bn reported in 2013. This increase was primarily due to sales contributed by Vinnolit and Westlake’s North American Specialty Products (NASP) PVC pipe business, higher sales prices for most major products and higher ethylene, caustic and polyethylene sales volumes.

Albert Chao, president and CEO, said: “Our record 2014 earnings reflect strong demand for our products, and the contribution to earnings from the expansion and conversion to ethane feedstock of our Calvert City ethylene plant, which was completed in the first quarter of 2014.

“The strategic investments we have made in our Vinyls business over the past several years, which include the ethylene and PVC expansions, the completion of our new world-scale Geismar, Louisiana chlor-alkali plant, the acquisitions of Vinnolit, our specialty PVC resins business, and our North American Specialty Products PVC pipe business, have positioned our Vinyls business as a low-cost producer and have given us a platform for continued growth,” he added.