DOW
Revenue increase in Q4 first time since start of pandemic / One-offs propel net income to profit versus 2019 loss / Strong PE and PU margins
US chemical group Dow (Midland, Michigan / USA ; www.dow.com) achieved its first year-on-year revenue growth in the quarter since the start of the coronavirus pandemic, with fourth-quarter sales rising 5% to USD 10.7 bn (EUR 8.9 bn) as global economic recovery helped drive up margins particularly in polyethylene and polyurethane applications. Tailwinds also came from currency swings and higher volumes, which contributed 2% and 1%, respectively, to revenue growth.

Earnings contributions from its joint venture Sadara (Jubail / Saudi Arabia; www.sadara.com) helped push up operating EBIT by USD 21m, or 2%, to USD 1.054 bn. Full-year sales, however, took a hammering from Covid-19, and shrank 10.3% to USD 38.5 bn. Dow provided no guidance for 2021 revenues.

Dow’s presentation charts to analysts showed that some of the quarterly headwinds were lower demand and prices in industrial sectors, including automotive, as well as pandemic-linked demand drop in energy and personal care end-markets. One-off cash proceeds of USD 620m from divesting US Gulf Coast marine and terminal assets (see Plasteurope.com of 23.10.2020) flattered the net income level and lifted it to a profit of USD 1.25 bn from a loss of USD 2.3 bn. In 2020, it swung to USD 1.23 bn from a loss of USD 1.36 bn in 2019.

At the Packaging & Specialty Plastics segment, sales gained 6% at USD 5.1 bn. Prices rose due to improved supply and demand fundamentals in PE, partly offset by lower ethylene and hydrocarbon co-product prices. Operating EBIT improved 20% at USD 780m.

Industrial Intermediates & Infrastructure – home to PU activities as well as chlor-alkali and vinyl – saw sales improving 8% to USD 3.5 bn, driven by demand in consumer goods, appliances, construction and durable goods. Operating EBIT expanded 34% to USD 296m.

Sales of USD 2 bn at Performance Materials & Coatings were flat. Volume advanced 2% as growth in do-it-yourself architectural coatings and home care was partially offset by declines in siloxanes. Price and volume declines in siloxanes more than offset volume expansion in silicones and coatings applications, which depressed operating EBIT by 79% to USD 50m.

CEO James Fitterling told analysts that Dow would look at bolt-on acquisitions that are worth “not in the billions, but smaller”. He said Dow’s interests include new technology and areas “driven by the market trends that we’re seeing in building and construction, mobility space, 5G, there are some sections where we want to continue to try and build in the areas of adhesives, sealants, and coatings types applications”.
10.02.2021 Plasteurope.com [246892-0]
Published on 10.02.2021
Dow: Chemiekonzern meldet ordentliches viertes QuartalGerman version of this article...

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