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Grace loss widens on weak refinery catalysts demand

February 19/2021

MOSCOW (MRC) -- W.R. Grace reports a fourth-quarter loss of USD43.5 million, down from a net loss of USD28.3 million in the year-ago quarter, as weak demand for transportation fuels amid the COVID-19 pandemic continues to suppress demand for the companys refinery catalysts, reported Chemweek.

Results include a a pre-tax non-cash pension mark-to-market adjustment of USD94.6 million. Adjusted earnings of USD0.88/share was down 32.8% YOY but beat the analysts consensus estimate by two cents, as reported by Refinitiv (New York).  Net sales declined 6.8% YOY, to USD470.2 million

Catalyst Technologies operating income declined 33.6% YOY, to USD88.8 million, while segment sales dipped 10.6% YOY, to USD348.7 million.  Operating income declined primarily due to lower gross profit, hurricane-related costs of approximately $8 million, and USD6.3 million lower income from our ART joint venture, partially offset by lower operating expense. The year-ago period also included USD8 million in business interruption insurance recoveries. Sales declined primarily due to lower volumes, as well as certain refiners switching to lower performance catalysts due to the pandemic. Global demand for transportation fuels and refinery operating rates have shown steady improvement over the last two quarters but remain below pre-pandemic levels, Grace says.

Materials Technologies operating income increased 23.3% YOY, to USD29.1 million, on sales up 6.0%, to USD121.5 million. Continued strength in pharma/consumer end-markets (+21.2%) and stronger demand in coatings (+10.8%) were partially offset by lower demand in chemical process end-markets (-12.2%), Grace says.

Looking ahead. Grace expects sales to grow 7-11% over 2020, with growth accelerating in the second half of 2021. We exited 2020 with sales, gross margins, and cash flow nearing pre-pandemic levels, and we are planning for a strong recovery in 2021, especially in the second half of the year, says Hudson La Force, president and CEO. We are encouraged by the vaccine rollout, though we are closely watching the level of COVID-19 cases and related economic indicators. We are well positioned to continue to capture growth as the recovery progresses.

As MRC informed previously, in April 2018, W. R. Grace & Co. completed the USD416 million acquisition of the Polyolefin Catalysts business of Albemarle Corporation.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.

A leader in polyolefin catalysts and licensing, W.R. 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.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, PP random copolymer, LDPE, HDPE, coatings, petrochemistry, Albemarle, W.R. Grace, USA.
Category:General News
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