Dow Chemical Q1 profit jumps 45% on consumer, infra solutions

(adds company comment in fifth paragraph, division performance in paragraphs 6-11)

LONDON (ICIS)–Dow Chemical’s first-quarter net income jumped 45% year on year to $1.39bn on the back of double-digit earnings increases for consumer and infrastructure solutions products, the US-headquartered chemicals giant said on Thursday.

The company also noted gains for its performance chemicals and performance plastics operations.

Sales fell 14% during the period to $12.4bn on the back of oil-driven price declines and currency devaluations, despite increased demand across all geographic regions.

“This performance underscores the power of our portfolio to deliver in the face of significant macroeconomic pressures, with issues like oil price declines and currency volatility, plus weather impacts in agriculture, all overcome in the quarter,” said Dow CEO Andrew Liveris.

“In addition, our large Saudi Arabia and US Gulf Coast projects will begin starting up later this year,” he added.

Agricultural sciences earnings before interest, tax and depreciation (EBITDA) was down 19% year on year for the quarter at $409m due to currency and price headwinds across most regions and softer demand from Europe, while consumer solutions earnings increased 10% over the same period to $286m, reflecting seven consecutive quarters of year-on-year EBITDA growth for the division.

The increases for the division were driven by strong sales increase in North America, and by the demand for structural adhesives for the automotive sector, Dow added.

Infrastructure solutions EBITDA increased $27m year on year to $295m on the back of double-digit demand increases for reverse osmosis technologies and increased sales in North America.

Performance materials and chemicals EBITDA grew 4% year on year during the quarter to $535m on the back of stronger demand and higher costs, the company said.

Performance plastics division earnings increased 2% year on year to $985m on strong growth for packaging and specialty plastics, products, the company said.

A choppy macroeconomic environment is expected to continue through the rest of the year, according to Liveris.

“Looking ahead, we expect geopolitical and economic uncertainty throughout 2015, although the oil market is projected to be more favourable behind growing global demand in the coming quarters,” he added.