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Stepan reports net income 28.2% higher YOY on strong consumer surfactant sales

October 22/2020

MOSCOW (MRC) -- Stepan reports net income of USD33.2 million, 28.2% higher year-on-year (YOY), as demand for surfactants amid the COVID-19 pandemic more than offset the crisiss impact on construction markets, said Chemweek.

Adjusted net income of USD1.56/share was up 30% YOY and beat the analysts consensus estimate of USD1.40/share, as reported by Refinitiv (New York). Net sales increased 2.8% YOY, to USD464.5 million, on a 5% increase in volumes.

"Surfactant third quarter operating income was up significantly on volume growth, which was mostly attributable to strong demand in the consumer product end markets driven by the fight against the COVID-19 virus, says F. Quinn Stepan, Jr., Chairman, President and Chief Executive Officer.   "Operations in Mexico delivered strong earnings growth versus the prior year quarter.  Our Polymer business was down slightly versus the prior year quarter as North America continues to experience construction project delays and cancellations as a result of COVID-19.  On a global basis, the demand for rigid polyols is gradually improving.  Our Specialty Product business results were down due to reduced margins and customer order patterns."

Surfactant operating income doubled YOY, to USD41.2 million due to higher demand for cleaning, disinfection, and personal wash products due to COVID-19. Segment sales increased 11%, to USD333.8 million. Polymer operating income declined 3.9% YOY, to USD22.4 million, due to construction delays and cancellations. Segment sales fell 14%, to USD116.7 million. Specialty Product operating income fell 30.4% YOY, to USD1.6 million, on lower medium change triglycerides margins. Segment sales were down 17% YOY, to USD13.9 million.

Looking ahead, Stepan expects surfactant volumes for consumer end markets to remain strong, although demand for agriculture and oilfield are expected to be flat and down, respectively, in 2020. Although rigid polyols sales have slightly recovered, the company expects it will remained challenged in the short-term as as re-roofing and new construction projects are deferred or canceled.  Longer-term, rigid polyols remain attractive as energy conservation efforts and more stringent building codes should increase demand, it adds. Specialty Product results are forecast to be flat compared to 2019.

As it was written earlier, Stepan will conduct planned maintenance on its 90,000 tonnes/year PA plant through end-October.

According to MRC's ScanPlast report, Russia's overall PVC production totalled 718,500 tonnes in January-September 2020, down by 0.3% year on year. At the same time, only two producers managed to increase their PVC output.
Author:Anna Larionova
Tags:North America, CIS, PVC, ftaleviy angidrid, EPVC, SPVC.
Category:General News
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