DowDuPont updates Q1 guidance, ag division hit by flooding in US midwest

HOUSTON (ICIS)–DowDuPont expects to report total company results in line with recent guidance, the US-based chemicals major said in an update on Thursday.

However, on a division level, agriculture is expected to report results below the company’s updated guidance from 28 March, due to longer than expected impacts of severe weather-related conditions.

March flooding in the US Midwest created transportation disruptions that halted farming operations and severely delayed seed deliveries into the early part of April, the company said.

Meanwhile, DowDuPont’s specialty products division is to report better than expected results while materials science results remain in line with the March update, the company said.

AGRICULTURE
The division is now expected to record Q1 net sales of $3.4bn and operating earnings before interest, tax, depreciation and amortisation (EBITDA) of about $665m – down 11 and 25% from the same quarter last year, respectively.

For the first half of 2019, the division currently expects net sales to be down low-single digits percent and operating EBITDA to be 3 to 5% below the same period last year.

“Deliveries are on track with current expectations and the revised first-half guidance reflects the possibility of reduced planted acres overall, lower than anticipated corn acres, and continued delays to the start of the planting season due to additional weather events,” DowDuPont said.

The division’s full-year year guidance is for organic sales up low-single digits percent and operating EBITDA of about $2.8bn.

The division is expected to overcome the first-half decline through “realisation of price and volume opportunities” on high demand products and new product launches and accelerated cost synergy delivery, resulting in an improvement in second half performance versus prior year, DowDuPont added.

SPECIALTY PRODUCTS
The division is now expected to record net sales of $5.4bn and operating EBITDA of $1.6bn, down 3% and flat, respectively, with the prior year period.

DowDuPont had previously expected that division’s net sales and operating EBITDA to be down low-single digits percent.

MATERIAL SCIENCE
The division is expected to record net sales of $10.8bn and operating EBITDA of $1.9bn, down 10% and 24%, respectively, from the prior year period, but in line with 28 March updated guidance.

The materials science division, known as Dow,  was separated from DowDuPont on 1 April and started trading on the New York Stock Exchange on 2 April.

DowDuPont will release Q1 financial results on 2 May.