Robust financial results have led Westlake Chemical Corp. to initiate a 2-for-1 stock split.
The split will take effect March 18 for shareholders of record as of Feb. 28. They will be given one additional share for each share held at that time, officials with Houston-based Westlake said in a recent news release. The firm also is increasing its per-share dividend by 12 percent to 25.2 cents per share on a pre-split basis.
“These actions reflect the financial strength of the company,” President and CEO Albert Chao said in the release.
Westlake’s per-share stock price was near $50 in mid-2012, but it has soared since then as the firm’s profitability has increased, largely due to advantages provided by North American natural gas in the ethane and ethylene supply streams. The price crossed the $100 mark in mid-2013 and passed $130 in early February. It closed near $133 on March 13.
For full-year 2013, Westlake’s profit grew almost 60 percent to more than $610 million, as its sales climbed more than 5 percent to almost $3.8 billion. Sales in 2013 for Westlake’s olefins unit — including polyethylene — grew 2 percent to almost $2.6 billion. The firm’s vinyls unit — including PVC resin and pipe — saw sales increase almost 13 percent to more than $1.2 billion.
Westlake’s PVC pipe unit operates as North American Pipe Corp. That Houston-based business ranked fourth on a recent Plastics News ranking of North American pipe, profile and tubing makers.
In the fourth quarter of 2013, Westlake’s sales volume in pounds grew by almost 13 percent vs. the year-ago period, with olefins volume up 11 percent and vinyls volume up almost 16 percent.
The Chao family owns about 70 percent of stock in Westlake. In late 2012, Albert Chao and his siblings — James Chao and Dorothy Chao Jenkins — each had a net worth of $1.4 billion, largely from their company stock, according to the Bloomberg Billionaires Index. On Feb. 18, Albert Chao sold almost 4,900 shares of Westlake stock for almost $630,000, according to an SEC filing.
Westlake has reinvested in the firm as its good fortune has increased. In early 2013, Westlake paid $175 million in cash for the U.S. PVC pipe and foundation business of French firm Cie. De Saint-Gobain. Westlake also added 230 million pounds of ethylene feedstock at its plant in Lake Charles, La., last year and is adding 180 million pounds of ethylene capacity and almost 200 million pounds of PVC resin capacity at a plant in Calvert City, Ky. Most recently, Westlake on Feb. 19 opened a new 70-employee chlor-alkali plant in Geismar, La.
In early 2013, Albert Chao said that new technical developments in the natural gas industry “make expansion in North America attractive.”