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DuPont sales down in Q3 on higher product prices, lower costs

November 01/2019

MOSCOW (MRC) -- DuPont recorded a 5% decrease in net sales year on year in the third quarter, continuing the downward trajectory from the second quarter, said Reuters

Sales in China, which accounted for about 15% of total revenue, were driven by higher demand for a film used in newer smartphones and helped offset weakness in its electronic and automotive sectors.

A protracted trade dispute between the United States and China as well as fears of a global economic slowdown have been weighing on DuPont and rivals Germanys BASF and Dow inc.

Chief Executive Officer Marc Doyle said destocking in semiconductors, used in everything from consumer electronics to data centers, was now behind and there were indications of demand stabilizing in the automotive sector.

To offset the weak macro environment, chemical companies have been relying on costs cuts to boost profits. Dupont said it slashed USD145 million in costs in the third quarter and was on track to deliver more than USD500 million for the full year.

The companys core operating margins improved 20 basis points, while cost of sales declined 4.5%.

Shares of DuPont, which makes everything from adhesives and resins to probiotics, rose as much as 3.3% to $67.75 in morning trading. Net sales fell 4.5% to USD5.43 billion, with volumes impacted by a slowdown in both the automotive and semiconductor end markets.

Sales in China declined only 2% in the third quarter from a year earlier, compared with a 3% fall in the second quarter and 10% in the first. Net income from continuing operations available for DuPont shareholders stood at USD367 million, or 49 cents per share, for the three months ended Sept. 30.

On a proforma basis, the company earned USD73 million, or 9 cents per share, in the same period last year.

Excluding items, the company earned 96 cents per share, above analysts average estimate of 95 cents per share, according to IBES data from Refinitiv. Dupont, which had raised its full-year profit forecast in August, also narrowed its estimate for proforma adjusted earnings per share to between USD3.77 and USD3.82, from its prior forecast of USD3.75 and USD3.85 per share.

As it was written earlier, BASF and DuPont Safety and Construction declared that the companies inked an agreement wherein BASF will sell its ultrafiltration membrane business to DuPont.

As MRC informed earlier, DuPont Teijin Films has launched a new depolymerisation process which upcycles post-consumer PET waste into technically-advanced BOPET films suitable for use in various applications.

As per MRC' DataScope,  import deliveries of Chinese injection moulded PET chips to the Russian market decreased in September this year by 72% compared to the same month last year - to 4,430 tonnes. The same indicator in August 2018 amounted to 15,640 tonnes. Shipments from China increased by 15% to 100,000 tonnes in the nine months of this year. The share of imports from China amounted to 90% against 86% for the same period last year. The leading Chinese suppliers to the Russian market were producers Yisheng, Wankai and Sinopec.

DuPont Teijin Films is a joint venture between DuPont and Teijin Ltd and supplies polyester films and related services to a wide range of industries, including healthcare, alternative energy, electronics and packaging.

DuPont makes a broad array of industrial chemicals, synthetic fibres, petroleum-based fuels and lubricants, pharmaceuticals, building materials, sterile and specialty packaging materials, cosmetics ingredients, and agricultural chemicals. It has plants, subsidiaries, and affiliates worldwide.
Author:Anna Larionova
Tags:PP, PET-granulate, BOPP films, PET preforms, BASF, DuPont, Russia, USA.
Category:General News
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