US Stepan’s Q3 surfactants profit doubles on pandemic boost for cleaning

HOUSTON (ICIS)–Stepan’s Q3 operating income in its surfactants segment more than doubled, driven by demand for cleaning, disinfection and personal wash products during the coronavirus pandemic, the US-based producer reported on Wednesday.

The strong performance in surfactants more than offset declines in Stepan’s polymers and specialty products segments.

Segment performance, Q3 ended 30 September 2020:

(in ‘000 $)	Q3 2020	Change from Q3 2019
Surfactants
Sales:	333,839	11%
Operating income:	41,151	109%
Polymers
Sales:	116,682	-14%
Operating income:	22,387	-4%
Specialty products
Sales:	13,959	-17%
Operating income:	1,593	-30%

KEY POINTS:
– Surfactants volume increased 8%, and selling prices were up 7%.

– Polymer operating income fell due to a 5% decline in global polymer sales volume.

– North American rigid polyol sales volume declined 8%, reflecting construction project delays and cancellations due to the pandemic. Lower demand within the phthalic anhydride (PA) business also contributed to the sales volume decline.

– Specialty products operating income fell, primarily due to lower margins within the  medium chain triglycerides (MCT) product line and customer order patterns within the food and flavour business.

Overall Q3 results:

(in ‘000 $)	Q3 2020	Change from Q3 2019
Sales	464,480	3%
Operating income	42,395	52%
Net income	33,168	28%

OUTLOOK
Surfactant volumes in the consumer product end markets should remain strong as a result of heightened demand for disinfection, cleaning and personal wash products, CEO Quinn Stepan said.

Although global demand for rigid polyols has slightly recovered, the business will likely continue to be challenged short-term as re-roofing and new construction projects have been deferred or canceled, the CEO said.

However, the long-term prospects for rigid polyols remain attractive as energy conservation efforts and more stringent building codes should increase demand, he added.

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