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PPG results tumble on COVID-19 impacts, but beat estimates

July 17/2020

MOSCOW (MRC) -- PPG Industries today reported second-quarter net income from continuing operations down 63.3% year-on-year (YOY), to $99 million, on net sales down 25%, to USD3.0 billion, said Chemweek.

Adjusted net income declined tk% YOY, to USD235 million, or 99 cents/share, ahead of analysts consensus estimate of 71 cents/share, as reported by Refinitiv (New York, New York). Selling prices were up 2% YOY, but volumes fell 24%. The lower sales volumes reflect the negative economic impact of the COVID-19 pandemic, PPG says.

The strongest performance came from our global architectural coatings businesses, which was driven by increased do-it-yourself (DIY) demand of PPG paint products in all major regions, says PPG chairman and CEO Michael McGarry. During the quarter, several of our businesses in China, including automotive original equipment manufacturer (OEM) coatings, general industrial coatings, and protective and marine coatings, achieved higher sales volumes year-over-year supported by a recovery in Chinese economic activity. Year-over-year demand was lower across most businesses in other major global regions, but our sequential monthly sales volumes improved in each region during the quarter."

Performance coatings segment sales declined 15% YOY, to USD2.1 billion, while segment operating income also fell 15%, to USD362 million. Volumes fell 15% and selling prices rose 3%, with sales boosted by currency translation. DIY architectural coatings sales were strong, but most other parts of the business reported declines, with the largest drops seen in aerospace coatings and automotive refinish.

Industrial coatings segment sales declined 40% YOY, to USD950 million, while segment income fell 85%, to USD34 million. Volumes were down 38%, while selling prices rose slightly. Automotive OEM coatings sales were down 50% YOY, and general industrial coatings sales were down 35% YOY, both due to COVID-19 shutdowns. Packaging coatings were a bright spot, with modes sales increases, PPG says.

"Looking ahead, we expect overall economic activity to continue to recover, although at a varied pace across end-use markets and regions given the uncertainty around the ongoing effects of the pandemic, McGarry says. We anticipate positive overall global architectural coatings demand trends to continue, with some moderation from the elevated DIY demand experienced in the second quarter. We expect continued, solid recovery patterns in automotive OEM and general industrial coatings demand in the U.S. and Europe, but still below 2019 levels. Automotive refinish and aerospace coatings sales are expected to be lower until travel and vehicle traffic density return toward more normal levels."

PPG expects aggregate sales volumes for the third quarter to decline 8-15% YOY.

As MRC informed earlier, PPG has reached a definitive agreement to acquire Industria Chimica Reggiana (ICR), an Italian manufacturer of paints and coatings for the automotive refinish and light industrial coatings industries.

Russia's output of chemical products rose by 4.4% year on year in May 2020 . Thus, production of basic chemicals increased year on year by 5.4% in the first five months of 2020. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-May.


mrcplast.com
Author:Anna Larionova
Tags:pigmentniy krasitel, paints and coatings, PPG.
Category:General News
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