Olin Announces Third Quarter 2020 Results

Wed November 4, 2020 5:33 PM|PR Newswire|About: OLNQ3: 11-04-20 Earnings Summary

• Transcript

EPS of $-0.1307 beats by $0.10 Revenue of $1.44B (-8.82% Y/Y) beats by $22.97M

CLAYTON, Mo., Nov. 4, 2020 /PRNewswire/ — Olin Corporation (OLN) announced financial results for the third quarter ended September 30, 2020.

The third quarter 2020 reported net loss was $736.8 million, or $4.67 per diluted share, which compares to the third quarter 2019 reported net income of $44.2 million, or $0.27 per diluted share.  Third quarter 2020 adjusted EBITDA of $195.5 million excludes depreciation and amortization expense of $142.1 million, a goodwill impairment charge of $699.8 million, information technology integration costs of $25.5 million, and restructuring charges and other non-recurring costs of $7.0 million.  Third quarter 2019 adjusted EBITDA was $292.9 million.  Sales in the third quarter 2020 were $1,437.6 million compared to $1,576.6 million in the third quarter 2019.

Scott Sutton, President and Chief Executive Officer, said, “Third quarter 2020 sales for the Chemicals businesses increased sequentially from second quarter 2020 by approximately 17%, and sales have increased every month since the low point in April.  Additionally, Olin drove sequential pricing improvement in the third quarter 2020 for chlorine and almost all chlorine derivatives and our newly established ECU (Electrochemical Unit) Profit Contribution Index improved in the third quarter compared to the second quarter.  Looking ahead, Olin’s recent price increases for chlorine, epoxy resins, bleach, ethylene dichloride and chlorinated organics are expected to positively contribute to our ECU Profit Contribution Index in the fourth quarter.  Fourth quarter volumes are expected to be challenged based on customer year-end inventory reductions and Olin selectively selling less into poor quality markets, slightly more than offsetting the positives from driving price increases.

“The Winchester business continued to drive improved segment earnings from strong commercial ammunition demand.  On October 1^st, Winchester began to operate the Lake City U.S. Army Ammunition Plant (Lake City) and expects to generate sequential incremental adjusted EBITDA of approximately $10 million in fourth quarter 2020 from both Lake City and price increases across the commercial ammunition portfolio.”

Sutton added, “Our employees are engaged in implementing a new winning model focused on leveraging Olin’s leadership across the whole ECU and ammunition landscape regardless of singular product demand.”

SEGMENT REPORTING

Olin defines segment earnings as income (loss) before interest expense, interest income, goodwill impairment charges, other operating income (expense), non-operating pension income, other income, and income taxes.

CHLOR ALKALI PRODUCTS AND VINYLS

Chlor Alkali Products and Vinyls sales for the third quarter 2020 were $755.1 million compared to $876.3 million in the third quarter 2019.  Third quarter 2020 segment earnings were $37.8 million compared to $112.7 million in the third quarter 2019.  The decreases in the third quarter sales and segment earnings compared to the third quarter of 2019 were primarily due to lower ECU pricing, mainly caustic soda and ethylene dichloride, and lower volumes.  The decline in segment earnings was partially offset by lower raw material and operating costs.  Chlor Alkali Products and Vinyls third quarter 2020 results included depreciation and amortization expense of $112.1 million compared to $122.2 million in the third quarter 2019.

EPOXY

Epoxy sales for the third quarter 2020 were $476.1 million compared to $511.6 million in the third quarter 2019.  The decrease in Epoxy sales was primarily due to lower product prices and lower epoxy resin volumes.  The third quarter 2020 segment earnings were $14.9 million compared to $24.2 million in the third quarter 2019.  The decrease in Epoxy segment earnings was primarily due to lower product prices and lower epoxy resin volumes, partially offset by lower raw material costs, primarily benzene and propylene, and lower operating costs.  Epoxy third quarter 2020 results included depreciation and amortization expense of $23.9 million compared to $26.9 million in the third quarter 2019.

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