Westlake Corp. is looking to recover from drops in sales and profit that it saw in full-year 2023.
Sales at Houston-based Westlake, a maker of commodity resins and construction products, were down 21 percent to $12.5 billion for the year, as profit tumbled 79 percent to $479 million.
"While global macroeconomic conditions were challenging in 2023, Westlake was able to achieve the second highest annual sales in our history by servicing our customers' needs, commercializing new product innovations and leveraging our position as a global low-cost manufacturer," President and CEO Albert Chao said in a news release.
Westlake's Performance & Essential Materials unit — including PVC and polyethylene resins — saw 2023 sales drop 24.5 percent to $8.3 billion, with operating profit plunging 97 percent to $59 million. Sales for 2023 at the firm's Housing & Infrastructure Products unit, including PVC pipe and other construction products, were down 12.5 percent to $4.2 billion, although operating profit jumped more than 5 percent to $710 million.
Chao said that unit's improved operating income took place "despite significant headwinds from rising mortgage rates and lower new home construction."
In the fourth quarter, Westlake took a $475 million non-cash impairment charge in its PEM business related to base epoxy resin assets in the Netherlands and associated goodwill of the global epoxy business acquired from Hexion Inc. in early 2022. Officials said the impairment charge "was driven by the rapid deterioration in global epoxy markets … as large global capacity additions met with weak global demand at a time of rapidly increasing operating costs, especially in our European operations."
Looking to 2024, Chao said global macroeconomic conditions "are largely unchanged from the fourth quarter of 2023."
"For full year 2024, we expect relatively healthy consumer spending in the U.S., supported by a strong labor market and moderating interest rates, to drive modest growth in HIP segment sales volume," he added.
In Westlake's PEM segment, Chao said "we are not expecting further deterioration, as we have recently seen some signs of stabilization in both sales prices and volumes in both domestic and export markets for most of our products."