Chemical Giant Three Quarter Performance Cliff Style Decline! The Highest Profit Fell By 86%!

Facing the increasingly severe external environment such as slowing global economic growth, increasing trade disputes and declining energy prices, many foreign chemical giants have declined significantly in the third quarter. However, we can see the difference between these strategies from the earnings reports of enterprises. Let's look at the third quarter's performance first.

One

Global energy prices fall

Dow Chemical Q3 net income fell 67% year-on-year

Dow Chemical announced its third quarter results in 2019, resulting in a 32% decline in quarterly operating profit as a result of increased chemical inventories and weak demand for plastic manufacturing.

In the three months ended September 30th, the company's net income fell 67% to $333 million, or $0.45 per share, compared with $1 billion 10 million a year, or 1.36 US dollars per share. Excluding special items, the company's operating profit in the third quarter was $0.91 per share, compared with $1.34 in the same period last year.

Earnings in the third quarter decreased by 31% to $1 billion 100 million in the first quarter of the year, reflecting the squeeze on profit margins and the impact of declining production in Argentina. But the above factors are partly offset by the cost synergy and the new capacity along the Gulf coast of Mexico. The decline in planned maintenance costs of the industrial solution business and the expansion of the profit margins in the packaging and specialty plastics business have resulted in an increase of $58 million in operating pre tax profits.

In addition, Dow Chemical's net sales in the third quarter were $10 billion 800 million, down 15% from the same period last year, mainly due to the drop in local prices caused by the drop in global energy prices. Sales fell by 2% over the same period last year, and the growth in demand for packaging materials, polyurethane and silicone applications was offset by weak sales of hydrocarbon by-products.

In the third quarter, the capital expenditure of the company was US $472 million and free cash flow was US $1 billion 300 million. The company returned $600 million to shareholders, including $500 million in dividends and $100 million in share buybacks. The equity loss amounted to US $44 million, and the equity income in the same period last year was US $135 million. The main reason for the loss is the impact of the compression of MEG and polyethylene margins, and the performance of Kuwait joint ventures is poor.

Two

BASF does not consider special projects in the three quarter

Pre tax earnings decreased by 24% compared with the same period last year.

The sales volume of BASF group in the third quarter of 2019 was 15 billion 200 million euros, a slight decrease compared with the same period last year. The pre tax earnings of excluding special items were 1 billion 100 million euros, down 24% from the same period last year, mainly due to falling prices in the two major sectors of materials and chemicals. As expected, the price of isocyanate dropped sharply. Besides, the steam cracking unit was scheduled to be overhauled, and the profit of cracking products decreased. All of these factors have a significant negative impact on the two major business areas of materials and chemicals. Market uncertainty and prudent buying behavior also partly led to this decline. Demand for key customer segments has not yet recovered. However, thanks to the increase in sales volume in the business areas of agricultural solutions and surface treatment technology, BASF has effectively maintained its sales volume in the same period last year.

In the third quarter of 2019, Dr.MartinBruderm ller, executive chairman of BASF Europe, said: "the downstream business department has achieved remarkable success over the same period last year in a difficult market environment."

Three

Weak chemical market

Saudi Arabia's three quarter net profit fell 86%

On the morning of October 27th local time, SABIC, the global chemical giant, released its third quarter operating results at its headquarters in Riyadh.

In the three quarter, SABIC sales revenue was 33 billion 690 million rial (about 63 billion 378 million yuan), a decrease of 23% compared with the same period last year. Net profit was 830 million rial (about 1 billion 561 million yuan), down 86% over the same period.

SABIC chief executive YouselfAl-Benyan said in a statement that in the three quarter, global economic growth slowed, new production capacity increased and oil prices continued to fall, making the business environment more challenging and increased the downward pressure on prices of chemical products.

YouselfAl-Benyan said that from the current market situation, the fourth quarter will be roughly the same as the three quarter data, and the market outlook for 2020 is still full of challenges.

Four

Henderson's three quarter performance fell sharply

Annual profits may drop by 20%.

Huntsman, the US chemical giant, said in October 25th that sales growth in the third quarter could not offset the decline in revenue from lower sales prices, while sales and profits of the PU sector declined over the same period last year. MDI

The other two sectors - high performance products, advanced materials and textile effects - also fell in sales and revenues in the same quarter. Huntsman's smallest sector textile effect was also affected by the weak market and Sino US trade war, and its sales and selling prices also declined.

Five

Wacker's third quarter sales rise

However, EBIDA decreased by 34% compared with the same period last year.

Wacker chemical released the latest report, the company's third quarter sales amounted to 1 billion 260 million euros, an increase of 2% over the same period, before tax depreciation and amortization profit (EBITDA) was 270 million euros, an increase of 13% over the same period last year.

Wacker said that the main reason for the significant increase of EBITDA was a special income. In September this year, the company received an insurance premium of about 110 million euros due to an accident in Charleston's production base in 2017. If this income is not included, the EBITDA of Wacker chemical is 160 million euros, which is 34% less than that of the same period last year.

Wacker chemical has adjusted its annual performance expectations. The company now expects sales to remain at the same level this year, and EBITDA will decrease by about 30% over the same period last year.

Six

Sales in the Chinese market decreased by 9%

In the first three quarters of 2019, the company continued to sell a total of 3 billion 272 million Swiss francs, and sales of 3 billion 278 million Swiss francs in the first three quarters of 2018. Thanks to the double rise in volume and price, organic sales increased by 3% in local currency, and the Swiss Franc also achieved steady growth.

In the first three quarters, most of the regions contributed to sales growth in local currency terms. Latin America and the Middle East and Africa grew by 11% respectively. Despite a 9% drop in the Chinese market, sales in Asia still increased by 4%. Sales in Europe grew by 2%, while the North American market contracted by 4%.

The increase in sales in the first three quarters of 2019 benefited from the growth of catalyst and natural resource businesses. This is mainly due to the positive contribution of petrochemicals and syngas. In local currency, sales in the catalyst business increased by 10%. Thanks to the significant expansion of oil and mining services and the growth of functional minerals, sales in the natural resources business increased by 4% in local currency. The sales volume of additives business has been reduced due to the weakening of the electronic and electrical industry.

Seven

Cisco net income plunged 70%

Local time on October 28th, Covestro released its three quarter earnings, and the stock was frustrated, and the value of its accumulated month failed.

In the third quarter of 2019, Kos said that the core sales increased by 5.3% over the same period last year. But in the past three months, the group's sales fell by 14.6% to 3 billion 200 million euros, which is similar to that of Coase.

The EBITDA in the three quarter was 425 million euros, which was 50.5% lower than the same period last year due to price reduction and profit squeeze. Net income fell to 147 million euros, down -70.4% compared with the same period last year, and free operating cash flow (FOCF) was 243 million euros, down -58% compared to the same period last year. This is mainly due to a decrease in cash flows from business activities and scheduled investments.