Materials firms Dow Inc. and Hexcel Corp. have reported lower financial results for the fourth quarter and full year 2023.
In the fourth quarter, Midland, Mich.-based Dow had sales of $10.6 billion, down 10 percent vs. the same period in 2022. The firm reported a $95 million loss for the quarter after showing a $647 million profit in the year-ago period.
For full-year 2023, Dow reported sales of $44.6 billion, down almost 22 percent vs. 2022. The firm's profit also plunged 85 percent to $660 million.
In a news release, Chair and CEO Jim Fitterling said that in the fourth quarter, Dow "continued to advance our strategic, financial and operational priorities in a challenging and dynamic macroeconomic environment." He added that "the strength of [Dow's] balance sheet allows us to navigate the bottom of the cycle and have the strength to invest and capitalize on the next upside in the global economy."
Fourth-quarter sales at Dow's Packaging & Specialty Plastics unit — including one of the world's largest polyethylene resin businesses — were down 8 percent to $5.6 billion, with operating profit up more than 1 percent to $664 million. For full-year 2023, P&SP had sales of $23.1 billion — down 21 percent — and operating profit of $2.7 billion – down 34 percent.
Dow's Industrial Intermediates & Infrastructure unit, which includes polyurethanes, saw sales fall 19 percent to $2.9 billion in the fourth quarter. That unit posted fourth-quarter operating profit of $15 million, down 91 percent from a year ago. For full-year 2023, the unit had sales of $12.5 billion — down 25 percent — and operating profit of $124 million — down 91 percent.Looking to 2024, Fitterling said that Dow "will maintain our commitment to financial and operational discipline as we continue to navigate dynamic market conditions."
"While we expect softness in industrial and durable goods demand to continue in the first quarter, we are encouraged by early positive signals in areas including construction, automotive and consumer electronics," he added.
Dow is one of the world's largest producers of PE and specialty resins. In November, the firm's board approved a $6.5 billion investment in sustainable materials — including polyethylene resin — in Fort Saskatchewan, Alberta.
Report from our sister publication Sustainable Plastics: Dow CEO predicts 15 percent of PE demand met by mechanical recycling by 2050
The Path2Zero project will be the world's first ethylene cracker and downstream derivatives unit with net-zero Scope 1 and 2 emissions, officials said. Path2Zero will increase annual production capacity for PE resin at Dow's existing Fort Saskatchewan site by about 4.4 billion pounds. It also will include construction of a new ethylene cracker and retrofitting of the site's existing cracker.
At Hexcel — a composites maker based in Stamford, Conn. — fourth-quarter sales were up 6.5 percent to $457 million, but the firm lost $18 million after posting a $37 million profit in the year-ago period.
For full-year 2023, Hexcel's sales were up 13 percent to $1.79 billion, but profit declined 16 percent to $105.7 million. In a news release, Chairman, CEO and President Nick Stanage said 2023 growth in Hexcel's Commercial Aerospace unit was led by widebody sales, as demand for lightweight and fuel-efficient composite aircraft "is strong and growing."
He added that sales at the firm's Space & Defense unit "benefitted from higher spending globally, with record level sales achieved in the fourth quarter."
Looking ahead to 2024, Stanage said that, based on record commercial aircraft backlogs and on customers anticipated build rate ramp, Hexcel "expects double digit sales growth again."
During 2023, Hexcel completed an expansion of its production site in Morocco and purchased a facility in Amesbury, Mass., where it had been operating since 2019. Products made by Hexcel include carbon fiber, woven reinforcements, resins, prepregs, honeycomb and additive manufactured parts.