Westlake Chemical Corp. — a major producer of polyethylene, PVC resins and compounds and PVC building products such as pipe and fence — posted higher sales but lower profit in 2018.
Houston-based Westlake on Feb. 19 reported full-year sales of more than $8.6 billion, up more than 7 percent vs. 2017. But the firm's profit tumbled almost 24 percent to just under $1 billion.
“We are very pleased with our 2018 results with records for both income from operations and EBITDA,” president and CEO Albert Chao said in a news release. “We saw solid demand for all of our major products in both the domestic and export markets.”
Westlake's 2018 sales for its vinyls unit — including PVC materials, pipe and fence — grew 10.5 percent to more than $6.6 billion, but sales for its olefins unit — including PE — slid almost 2 percent to just over $2 billion.
Vinyls operating income for 2018 jumped almost 43 percent to $913 million, while olefins operating income slumped 12.5 percent to $573 million.
In the release, officials said that vinyls operating income grew mainly because of higher sales prices and volumes for caustic soda, lower purchased ethylene costs, improved operating rates and lower costs associated with planned turnarounds and unplanned outages, as compared to 2017.
They added that olefins operating income declined because of lower margins resulting from higher ethane feedstock costs and lower PE sale prices, partially offset by higher PE sales volumes.
Chao added in the release that company officials “are excited” about the late 2018 acquisition of global compounder Nakan for $265 million.
Nakan is based in Reims, France, and has eight production facilities in Europe, Asia and North America. The firm also has a research facility in France and application lab in the U.S.
Nakan has annual sales of about $300 million. Its compounds are used in a wide variety of applications, including automotive, building and construction, and medical.
“We welcome [the Nakan] team into the Westlake family and look forward to leveraging their capabilities with our current operations to serve our customers and drive value for our shareholders,” Chao said.
Earlier in 2018, Westlake announced plans to add 750 million pounds of PVC resin capacity at plants in Louisiana and Germany by the end of 2021.
On Wall Street, Westlake's per-share stock price had a rough time in 2018, starting the year at $112.50 but tumbling to $74 by the end of the year for a decline of almost 34 percent. The price was at $75.60 in early trading Feb. 22.
