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Stepan profits surge 40.4% YOY on cleaning products demand, insurance payment

February 20/2021

MOSCOW (MRC) -- Stepan reports net income of USD30.9 million, up 40.4% year-on-year (YOY) on higher demand for cleaning products amid the COVID-19 pandemic and an insurance recovery related to a power outage in early 2020. Adjusted earnings of USD1.42/share was 29.1% higher YOY and beat the analysts consensus estimate of USD1.08, as reported by Refinitiv (New York), said Chemweek.

Net sales increased 11.2% YOY, to USD494.7 million. Surfactant operating income was USD43.3 million versus USD33.9 million in the prior year. This increase was primarily attributable to an 8% increase in global sales volume as well as improved product and customer mix.  The sales volume growth was principally due to higher demand for cleaning, disinfection and personal wash products as a result of COVID-19.

Polymer operating income was USD22.8 million versus USD11.4 million in the prior year. This increase was mostly attributable to an insurance recovery related to the first quarter 2020 Millsdale, IL plant power outage and a 7% increase in global Polymer sales volume versus prior year.  Global rigid polyol volume growth of 10%, principally in Europe, more than offset lower demand within the phthalic anhydride business.

Specialty Product net sales were USD19.6 million, a 6% increase YOY.  Sales volume was down 1% between quarters and operating income improved 2%.

Stepan expects surfactant volumes in consumer end markets to remain strong and for volumes to agricultural and oilfield markets to improve slightly in 2021. Global demand for rigid polyols has slowly begun to recover from delays and cancellation related to the pandemic, and a modest pace for recovery is expected to continue in 2021. Despite recent challenges, we believe the long-term prospects for rigid polyols remain attractive as energy conservation efforts and more stringent building codes should increase demand, says F. Quinn Stepan, Jr., Chairman and Chief Executive Officer. We believe our acquisition of INVISTA's aromatic polyester polyol business and two manufacturing sites positions us to meet long term demand growth.  We anticipate our Specialty Product business results will improve slightly year-over-year."

As MRC informed before, Stepan conducted planned maintenance at its 90,000 tonnes/year phthalic anhydride (PA) plant Millsdale, Illinois, US, from early October to end-October, 2020.

Phthalic anhydride is widely used in for the production of paints and varnishes and plasticizers for PVC products. In a small amount it is used in the manufacture of rubber products, tires. In addition, it is used in the light, pharmaceutical and electrical industries.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1%  year on year.
Author:Anna Larionova
Tags:petroleum products, PVC, ftaleviy angidrid, Stepan Company, USA.
Category:General News
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