Strong results for DowDuPont in Q4
DowDuPont has posted strong results for the fourth quarter of 2017, the first full quarter of operations for the combined company.
The US chemicals producer saw sales rise 13% to $20 billion, beating analysts’ expectations which were generally around $19.5 billion. Pro forma net sales for the same period last year were $17.7 billion.
Operating EBITDA jumped by 24% to $3.9 billion on a pro forma basis, primarily on volume and price gains, including new capacity additions on the US Gulf Coast and Saudi Arabia. The company said it raised prices by about 5% across markets in the fourth quarter, while demand was up by 6%.
For full-year 2017, the company said pro forma net sales increased to $79.5 billion, 12% higher than the year before, with gains in all operating segments and geographies. Pro forma operating EBITDA increased 15% to $16.2 billion.
“We delivered these results while completing our merger, realigning the business around key end markets and achieving more than $800 million in run-rate savings from our cost synergy program,” said CEO Ed Breen, who added that the company had increased its planned cost savings from the merger to $3.3 billion from $3 billion.
The results excluded one-off items including a charge of $3.1 billion for restructuring costs and impairment charges.
DowDuPont noted that it had gained tax benefits of $1.1 billion as a result of the tax reform package that President Donald Trump signed into law on Dec. 22, 2017. It expects its effective tax rate this year to be 1-2 percentage points lower as a result of the changes.
Plans for the company to split into three separate units are progressing, and DowDuPont said it now intends to spin off its Materials Science business by the end of March 2019 and Agriculture and Specialty Products by Jun. 1, 2019.