Westlake Corp. had a strong financial year in 2022, showing double-digit gains in both sales and profit.
For the year, sales at Houston-based Westlake — a major supplier of polyethylene and PVC resins and PVC home and construction products — were up 34 percent to $15.8 billion, with profit up more than 11 percent to $2.25 billion.
In a news release, President and CEO Albert Chao said that 2022 "was a monumental year" for Westlake as the firm posted record full-year sales and net profit and added Westlake Epoxy to its Performance Materials portfolio. Westlake also further integrated businesses acquired in the second half of 2021 into its Housing & Infrastructure Products segment, he added.
"Our full-year results reflect the strong start to the year, characterized by tight supply-demand conditions and improving profitability across our businesses, which gave way to softer market conditions in the second half of the year, Chao said.
Sales at the firm's Performance & Essential Materials unit, including resins, jumped 26 percent to $11 billion, even as the unit's operating profit dropped 6 percent to $2.4 billion. At Westlake's Housing & Infrastructure Products unit, including downstream products, sales surged 55 percent to $4.8 billion, with operating profit soaring almost 90 percent to $675 million.
Chao said that in the fourth quarter, Westlake's low-cost position in North America allowed the firm to shift sales of PE and PVC resins into export markets, although pricing and margins were lower in that channel.
In Housing & Infrastructure Products, Chao said that fourth-quarter volume declines reflected construction seasonality, along with customer destocking and continuing impact on housing affordability from the higher U.S. mortgage rates. He added that product pricing and repair and remodel demand "have remained relatively resilient."
Looking ahead to 2023, Chao said that global macroeconomic uncertainty "remains high, and while we are not immune to weaker global demand, we remain confident in the fundamentals of our business."
"We expect [materials] to run profitably at higher operating rates, supported by our North American footprint that benefits from a structural global cost advantage in feedstocks, fuel and power," he added. "In [housing and infrastructure], the slowing of residential construction is expected to continue in response to historically low home affordability, [but] we expect modest growth in repair and remodeling activity."
On Wall Street, Westlake's per-share stock price began 2023 near $99 but was at $118.40 in early trading Feb. 22 for a gain of almost 20 percent.