Lower selling prices and production outages affected Westlake Chemical Corp. in 2016, as the materials maker’s sales grew even as profit declined.
Houston-based Westlake saw full-year sales jump almost 14 percent to almost $5.1 billion. Full-year profit, however, tumbled 37 percent to just under $420 million.
Westlake’s vinyls unit — including PVC resin and compounds — enjoyed 44 percent sales growth, lifting its full-year total to almost $3.2 billion. But sales in its olefins unit — including polyethylene resin — slid 16 percent to less than $1.9 billion.
Full-year operating profit was down significantly for both units. Vinyls’ operating profit tumbled 31 percent to $174 million, as Olefins’ operating profit slid 25 percent to $558 million.
In a news release, company officials cited lower sales, lower production rates, an unplanned outage at a plant in Calvert City, Ky., and a planned turnaround at a plant in Lake Charles, La., as reasons for Vinyls’ lower operating profit.
The drop in Olefins’ operating profit was caused by lower sales, lower production rates, the Lake Charles turnaround and other unplanned outages, they added.
In spite of Westlake’s 2016 results, President and CEO Albert Chao said in the release that he was pleased with the firm’s earnings. “We continue to benefit from solid demand for our products and, as we entered the new year, a rising price environment,” he added.
Chao also said that Westlake is making “significant progress” in integrating Axiall Corp., the maker of PVC resin and building products that Westlake acquired in June for $3.8 billion.
Westlake’s per-share stock price has enjoyed a good run on Wall Street. The price was under $40 as recently as June, but closed at $64.55 on Feb. 22.