MOSCOW (MRC) --Westlake Chemical Corporation’s first-quarter sales fell by nearly 5%, year on year on the back of lower selling prices, said the company.
Net profit, however, doubled on the back of a tax benefit related to the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March to alleviate the coronavirus pandemic aftermath, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose.
Net income rocketed due to a tax rate benefit of USD62m from the carry-back of federal net operating losses, as permitted under the CARES Act enacted in March 2020.
The firm’s olefins division posted income from operations of USD62m, up from USD37m in Q1 2019, due to higher polyethylene (PE) sales and lower feedstock costs.
In its vinyls division, income from operations fell to USD73m, down from USD101m a year earlier, due to lower sales for caustic soda and polyvinyl chloride (PVC) due to the global slowdown caused by the coronavirus pandemic.
In February 2018, as MRC informed before, Westlake Chemical announced plans to expand its capacities for the production of PVC and VCM at three of its chemical facilities. Two of the plants are located in Germany (Burghausen, Gendorf) and one is located in Geismar, Louisiana. The expansions in Burghausen and Geismar are expected to be completed in 2019. The Gendorf expansions are expected to be completed in 2020 and 2021.
Ethylene and propylene are feedstocks for producing PE and PP.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, chlor-alkali and derivative products, PVC suspension and specialty resins, PVC Compounds, and PVC building products including siding, pipe, fittings and specialty components, windows, fence, deck and film.
MRC