Westlake Corp's quarterly profit falls on lower sales prices

Westlake

02/11/2023 12:46

Nov 2 (Reuters) - Chemicals maker Westlake Corp  WLK.N 
posted a drop in third-quarter profit on Thursday after average
sales prices decreased due to lowering global industrial
activity and higher interest rates.
    Weak macroeconomic conditions have weighed on demand for the
company's products reducing Westlake's average sales prices by
20% year on year.
        "As we enter the fourth quarter of 2023, weak
macroeconomic conditions, including elevated inflation and
high-interest rates, remain in place driving softer demand," CEO
Albert Chao said in a statement.
    The Houston, Texas-based company produces polyethylene and
vinyl chemicals vital to the manufacturing of polymers used in
various products including wind turbine blades, injection
molding and trash bags. 
    The company reported net sales of $3.12 billion, down from
about $3.96 billion last year, missing analysts' average
estimate of $3.25 billion, according to LSEG.
    Westlake reported net income of $285 million, or $2.20 per
share, for the quarter ended Sept. 30, down from $401 million,
or $3.10 per share, a year earlier.
    Income from operations of its performance and essential
materials segment decreased about 70% to $105 million from last
year as average sales prices and integrated margins for major
products, like PVC and caustic soda, declined.
    Prices of polyethylene and polyvinyl chloride(PVC) move with
the prices of crude oil, an essential ingredient in the
manufacturing process. Brent oil prices  LCOc1  fell about 13%
in the third quarter year-on-year.
    Westlake, which also manufactures building products, pipe &
fittings, benefited from a demand for new constructions boosted
by a shortage of previously owned homes.
    The company saw its housing and infrastructure products
segment rise by around 38% to $256 million, year-on-year, on
lower materials costs.

 (Reporting by Roshia Sabu; Editing by Tasim Zahid)
 ((Roshia.Sabu@thomsonreuters.com;))