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Grace sales slide 11% as transportation fuel demand remains depressed

October 29/2020

MOSCOW (MRC) -- W.R. Grace reports third-quarter net income of USD7.0 million, down 87.0% year-on-year (YOY), as weak transportation fuel demand due to the COVID-19 pandemic continues to negatively impact refining catalysts volumes, reported Chemweek.

Adjusted earnings of USD0.56/share was 43.8% lower YOY and met the analysts consensus estimate compiled by Refinitiv (New York). Net sales were down 10.9% YOY and flat sequentially.

Grace says a 15.4% drop in Catalysts Technologies volumes more than offset a 3.8% increase in Materials Technologies volumes, which was driven primarily by growth in pharma/consumer end-markets. The refining catalyst market stabilized and is improving from the second quarter, but transportation fuel demand is still lagging the overall economic recovery, the company adds. Power outages at the companys Lake Charles, Louisiana catalyst production site due to Hurricane Laura also increased operating costs.

Catalyst Technologies segment operating income declined 36.2% YOY, to USD67.1 million, on sales down 15.4%, to USD305.7 million. Materials Technologies segment operating income fell 6.9% YOY, to USD24.3 million, on sales up 4.2%, to USD113.7 million.

Hudson La Force, Graces President and CEO, says the company is encouraged by improving demand trends. We expect Specialty Catalysts and Materials Technologies end markets to continue their recovery and sales to return to 2019 levels on a run-rate basis during 2021, he adds. In Refining Technologies, the effects of the pandemic will remain a headwind until transportation fuel demand more fully recovers.

Grace expects fourth-quarter adjusted earnings in the range of USD0.84-0.88/share, below the analysts consensus of USD0.94/share. The company also expects sales to increase 10-13% sequentially.

As MRC informed earlier, W. R. Grace & Co. licenses UNIPOL PP process technology to Dongguan Grand Resource for two additional lines. This is part of the continued investment in UNIPOL PP Process Technology lines by DGR. The first license was signed in 2016. Building additional capacity at the same site will help DGR further optimize costs, shorten construction time, and broaden their product portfolio.

According to MRC's ScanPlast report, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

A leader in polyolefin catalysts and licensing, Grace has the worlds broadest portfolio of polypropylene and polyethylene catalyst technologies used to produce thermoplastic resins for a variety of applications. A leading innovator and strategic partner to its customers, Grace supplies catalyst solutions for all polyolefin processes, as well as polypropylene process technology and process controls. Grace employs approximately 3,700 people in over 30 countries.


mrcplast.com
Author:Margaret Volkova
Tags:PP, PE, PP random copolymer, copolymer, construction, W.R. Grace, China, Russia, USA.
Category:General News
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