Dow sees second quarter revenues slide

Dow Chemical has said a sales decrease in Europe – driven by currency fluctuations – led a 10% decline in its total second quarter revenues.

Total sales for the period came in at $14.5bn (£9.3bn), while volumes dipped 5%. Earnings before interest, tax, depreciation and amortisation (Ebitda) were nearly £2bn (£1.3bn).

On an adjusted total sales basis the revenue decline was 6%. The US chemicals giant said the fall was “led by Europe, where sales decreased 10%, driven by adverse currency conditions totalling more than $400m (£257m), or 8%”.

Dow said overall prices fell 5%, while purchased feedstock and energy costs fell by nearly $1bn (£642m) compared with the same period last year. Prices fell in all geographical areas, noted the group, but Europe again led the way, down 8%.

Operationally, sales in the group’s electronic and functional materials arm were $1.2bn (£770m), 4% lower than the same period in 2011; coating and infrastructure’s sales were $1.9bn (£1.22bn), down 6%; performance materials were $3.4bn (£2.2bn), down 11%, and performance plastics were $3.7bn (£2.4bn), down 6%.

However Dow’s agricultural sciences business posted what the group called “record second quarter sales” of $1.7bn (£1.1bn), up 12%.

Commenting on the numbers Andrew Liveris, Dow’s chairman and chief executive, said: “Sustained uncertainty in the world economy continues to present a challenging operating environment, and this quarter was no exception.

“Weak demand due to a slowdown in global growth drove declining prices [in the second quarter]. This, coupled with an usually high turnaround season for Dow and a large currency effect, pressured margins in the quarter.”

Liveris said Dow had all its “pre-stated levers in place” and was driving “a full array of efficiency and cost reduction measures – tightly managing operations to generate cash flow improvements.

“Dow remains intensely focused on execution – maximising our world-leading feedstock advantage, driving operating rate improvements in our integrated portfolio, tailoring growth investments to reflect macroeconomic realities, and ensuring prudent use of cash.”

[ Back ]