Olin Q2 Epoxy Highlights
CLAYTON, Mo., July 31, 2019 /PRNewswire/ —
Second Quarter 2019 Highlights
- Net loss of $20.0 million and adjusted EBITDA of $204.6 million
- Full year 2019 net income forecast of $132 million to $207 million
- Adjusted EBITDA 2019 forecast of $1.075 billion to $1.175 billion
- Successful refinancing completed in July – well positioned for 2020
Olin Corporation (NYSE: OLN) announced financial results for the second quarter ended June 30, 2019.
Second quarter 2019 reported net loss was $20.0 million, or $0.12 per diluted share, which compares to second quarter 2018 reported net income of $58.6 million, or $0.35 per diluted share. Second quarter 2019 adjusted EBITDA of $204.6 million excludes depreciation and amortization expense of $151.4 million, restructuring charges of $3.8 million, information technology integration costs of $21.5 million and an environmental insurance-related settlement gain of $4.8 million. Second quarter 2019 adjusted EBITDA includes a $20 million expense for environmental investigatory and remedial activities, related to future spending at a legacy manufacturing site. Second quarter 2018 adjusted EBITDA was $325.4 million. Sales in the second quarter of 2019 were $1,592.9 million compared to $1,728.4 million in the second quarter of 2018.
John E. Fischer, Chairman, President and Chief Executive Officer, said, “Consistent with our recent update, Olin reported second quarter 2019 adjusted EBITDA of $205 million, resulting in first half 2019 adjusted EBITDA of $475 million. Looking to the year’s second half, we expect improved results due to a number of different factors, including seasonally higher volumes and operating rates across chlorine, chlorine-derivatives, and epoxy products, approximately $25 million of lower maintenance turnaround costs, improved caustic soda pricing, and the absence of several one-time negative events that occurred in the first half of the year. Longer term, we continue to believe that the breadth of Olin’s chlorine derivative portfolio is an advantage. We anticipate continued demand growth for chlor-alkali and epoxy products and minimal global capacity additions. As a result, we believe that Olin remains well positioned to capitalize on these dynamics.
“The recently completed bond offering strengthens our financial position and increases our financial flexibility, while creating additional capital allocation options with the goal of maximizing long-term value for Olin’s shareholders. With this offering, we have positioned Olin to refinance the high-cost bonds we assumed as part of the 2015 acquisition of Dow’s Chlorine Products Businesses with new term loans on attractive terms when these bonds become callable in late-2020,” Fischer concluded.
Several one-time events put downward pressure on Olin’s Epoxy segment during the second quarter of 2019. Looking ahead, the Epoxy segment is poised for an improved performance in second half 2019 driven by higher seasonal volumes, resumption of normal customer operations following the re-opening of the International Terminal Company in Houston, Texas, and lower maintenance turnaround costs.
Epoxy sales for the second quarter 2019 were $518.8 million compared to $543.8 million in the second quarter 2018. The decrease in Epoxy sales was primarily due to lower product prices partially offset by higher cumene and epoxy resin volumes. The second quarter 2019 segment income was $3.9 million compared to $24.8 million in the second quarter 2018. The decrease in Epoxy segment earnings was primarily due to lower product prices, partially offset by lower raw material costs, primarily benzene and propylene, and lower operating costs. Epoxy second quarter 2019 results included depreciation and amortization expense of $25.8 million compared to $25.1 million in the second quarter 2018.