Olin Announces Second Quarter 2020 Results
Wed August 5, 2020 4:15 PM|PR Newswire|About: OLN
CLAYTON, Mo., Aug. 5, 2020 /PRNewswire/ — Olin Corporation (OLN) announced financial results for the second quarter ended June 30, 2020.
The second quarter 2020 reported net loss was $120.1 million, or $0.76 per diluted share, which compares to the second quarter 2019 reported net loss of $20.0 million, or $0.12 per diluted share. Second quarter 2020 adjusted EBITDA of $71.5 million excludes depreciation and amortization expense of $136.5 million, information technology integration costs of $20.4 million, and restructuring charges and other costs of $5.5 million. Second quarter 2019 adjusted EBITDA was $204.6 million. Sales in the second quarter 2020 were $1,241.2 million compared to $1,592.9 million in the second quarter 2019.
John E. Fischer, Chairman, President and Chief Executive Officer, said, “Second quarter 2020 sales for the combined Chlor Alkali Products and Vinyls and Epoxy businesses declined year-over-year by approximately 27%. The sales decline reflects weaker customer demand and a high level of planned maintenance turnaround activity which occurred early in the second quarter. Overall chemical businesses sales increased each month during the quarter from the April low point and have continued to increase during July.
“The Chlor Alkali Products and Vinyls business experienced weaker broad-based customer demand from almost all end-use chemical customers in the second quarter 2020 compared to the first quarter of 2020. Shipments to our urethane customers were particularly weak and declined by approximately 44% compared to first quarter 2020. During the second quarter of 2020, caustic soda pricing increased approximately 8% in Olin’s system when compared to the first quarter of 2020, while ethylene dichloride pricing sequentially declined approximately 50%. In third quarter 2020, we expect sequential improvement in both caustic soda and ethylene dichloride pricing. We also expect the volumes in the third quarter of 2020 to improve from second quarter 2020 levels primarily due to lower maintenance turnaround activity.
“The Epoxy business experienced weaker product demand from European and North American automotive, oil and gas, and industrial coatings customers in the second quarter 2020 compared to the first quarter of 2020. Second quarter 2020 epoxy resin shipment volumes decreased approximately 30% from both first quarter 2020 and second quarter 2019. The sequential decline in Epoxy segment earnings was attributable to lower volumes. Lower operating costs offset the higher planned maintenance turnaround costs.
“For the fourth consecutive quarter, the Winchester business experienced year-over-year improvement in segment earnings. Commercial ammunition demand remained elevated throughout the second quarter of 2020. We expect this higher level of ammunition demand to continue at least through the remainder of 2020.
“During the second quarter of 2020, Olin completed several refinancing actions, which enhanced our liquidity. These actions provide Olin the flexibility to navigate the current economic conditions. These refinancing actions complement our efforts to reduce our working capital, minimize spending and manage our balance sheet to maximize financial flexibility. The refinancing actions allowed us to make the required ethylene payment to the Dow Chemical Company (Dow) during the quarter under favorable terms.
“The Chlor Alkali Products and Vinyls and Epoxy businesses remain challenged by the current economic conditions. Visibility around future demand continues to be limited and customer order patterns remain volatile. The combination of lower maintenance turnaround costs, improved sales volumes, and higher product pricing are forecast to generate a third quarter 2020 adjusted EBITDA that is more than double second quarter 2020 levels. June and July activity levels support this outlook.« Previous Post Next Post »