US Axiall losses widen on plant outage and severe winter

05 May 2014 23:23 Source:ICIS News

HOUSTON (ICIS)--Axiall blamed severe winter weather and the more than three-month outage at its PHH vinyl chloride monomer (VCM) plant on Monday as it reported a loss of $11.6m for the first quarter on sales of $993.7m.

The results widen losses of $3.5m on sales of $1.1bn for the first quarter of 2013.

“Our first-quarter results were challenged by the unusually cold weather and the outage of our PHH VCM facility,” Paul Carrico, Axiall’s president and CEO, said in a prepared statement that accompanied the company’s financial results.

Carrico said that the second quarter should bring peak demand season and improving pricing and costs for the Atlanta, Georgia-based chlor-alkali producer.

The company reported weaker results in all three of its major segments when considering that only two months of the 2013 results were included.

In its chlorovinyls division, which includes polyvinyl chloride (PVC) resins, caustic soda, chlorine and other products, the company reported net sales of $682.2m, versus $614.5m for first quarter 2013, when only February and March’s business activity by PPG was included. The former Georgia Gulf bought PPG in the early first quarter of 2013. The combined company was renamed Axiall.

The company reported earnings before interest, taxes, depreciation and amortization (EBITDA) of $76.2m, compared with $134.2m during the first quarter of 2013.    

Lower operating rates, higher natural gas and maintenance costs were exacerbated by cold-weather logistics problems and lower production efficiencies, the company said.

The company reported significantly lower sales in its aromatics division, too, down to $156.8m from $284.5m during the first quarter of 2013. The lower sales were blamed on lower phenol export volumes on new capacity in Asia, which also lowered domestic cumene sales volumes, the company said.

Sales in its building products segment, which includes finished products made from PVC and related materials, were down to $154.7m from $162.2m for the 2013 quarter. The company blamed a weaker Canadian dollar for a 3% decrease in sales volume there, partially offset by a 13% increase in US sales.

The company reiterated that the VCM plan in Lake Charles, Louisiana, is back in production and that the peak sales season should improve results going forward.
By Bill Bowen