Dow narrows loss in Q3 but sales down 10% on lower prices, volumes

LONDON (ICIS)–Dow’s third-quarter net loss from continuing operations – at $25m – was a sharp improvement on the loss of $217m in the second quarter, but a 9% fall in prices and a 1% drop in volumes year on year took their toll on sales, the US chemicals major said on Thursday.

Operating earnings before interest and taxes (EBIT), or operating profit, fell more than 30%.

Dow ($/m)	Q3 2020	Q3 2019	Change
Sales	9,712	10,764	-9.77%
Net income/loss	-25	333	N/A
Operating EBIT	761	1,117	-32%

Dow’s three divisions – Performance Materials & Coatings, Industrial Intermediates & Infrastructure and Packaging & Specialty Plastics – all posted a fall in sales and operating EBIT.

With crude oil prices around the $40/bbl mark during the third quarter, the company’s local selling prices fell 9% year on year, although they were up 5% quarter on quarter, it said.

An exception to lower prices in most segments was polyethylene (PE) propped up by packaging, which was up 12% quarter on quarter, and polyurethanes (PUs).

Operating rates increased across the board, said Jim Fitterling, Dow’s chairman and CEO.

“Sequentially [from the second quarter], volume increased 9% with all operating segments and regions delivering gains on improved industry demand trends across furniture and bedding, appliances, packaging, construction and automotive end markets,” he said.

However, Fitterling warned that the recovery was irregular with several sectors still suffering from the impact of the pandemic.

“Although the third-quarter rebound was significant, the recovery has been uneven across markets, and we expect this will continue in the near term,” he added.

Front page picture: Dow’s headquarters in Midland, Michigan
Source: Dow