Olin reports improved sales, SunBelt acquisition adds earnings

Olin reports improved sales, SunBelt acquisition adds to earnings

12:15 PM, 7th June 2011
Olin reports improved sales, SunBelt acquisition adds to earnings
Joseph D Rupp, Chairman, President, and CEO, Olin Corporation.

CLAYTON, US: Olin Corporation announced its first quarter 2011 net income was $ 133.7 million or $ 1.66 per diluted share, which compares to $ 14.1 million or $ 0.18 per diluted share in the first quarter of 2010. On February 28, Olin completed acquisition of PolyOne’s 50 per cent interest in the SunBelt partnership. Sales in the first quarter of 2011 were $ 436 million compared to $ 362 million in the first quarter of 2010.

 

“The positive pricing and volume momentum we have been experiencing in our Chlor Alkali business began accelerating in the first quarter of 2011 and should benefit the business for the balance of the year. The momentum provides us with the opportunity in 2011 to achieve the highest level of EBITDA since the spin-off of Arch Chemicals in 1999,” said Joseph D Rupp, Chairman, President, and CEO, Olin Corporation.

 

“First quarter 2011 segment earnings were $ 45.2 million, which is more than quadruple the first quarter 2010 Chlor Alkali segment earnings of $ 10.6 million. This improvement reflects significant year-over-year increases in both volumes and ECU netbacks. Year-over-year chlorine and caustic soda volumes improved approximately 8 per cent while ECU netbacks improved approximately 19 per cent,” added Rupp.

 

“The first quarter 2011 Chlor Alkali results include approximately $ 3.7 million of incremental operating earnings associated with the SunBelt acquisition. The overall Olin results inclue approximately $ 0.8 million of SunBelt transaction costs and an additional $ 0.5 million of SunBelt interest expense. The Winchester earnings declined approximately 35 per cent compared to the first quarter of 2010 due to higher commodity metal and other material costs,” he said.

 

“Second quarter 2011 net income is forecast to be in the $ 0.45 per diluted share range. Second quarter 2011 Chlor Alkali segment earnings are expected to improve compared to the first quarter of 2011 reflecting continued improvement in both pricing and volumes and the contribution from a full quarter of 100 per cent SunBelt ownership. Earnings in the Winchester segment are expected to decline more than 50 per cent from the second quarter 2010 levels, reflecting lower volumes, a less favourable product mix and higher commodity metal costs,” informed Rupp.

 

Second quarter 2011 results are also forecast to include approximately $ 6 million of higher legacy environmental costs compared to the first quarter of 2011, which should be more than offset by approximately $ 10 million of pretax recoveries from third parties of environmental costs incurred and expensed in prior periods, said the company.

 

Segment-wise Chlor Alkali product sales for the first quarter of 2011 were $ 299.4 million compared to $ 230.6 million in the first quarter of 2010. First quarter 2011 Chlor Alkali segment earnings of $ 45.2 million increased compared to the $ 10.6 million earned in the first quarter of 2010, due to higher volumes and higher prices.

 

For the Winchester segment first quarter 2011 sales were $ 136.6 million compared to $ 131.4 million in the first quarter of 2010. Winchester’s first quarter 2011 segment earnings were $ 12.5 million compared to $ 19.5 million in the first quarter of 2010. The decrease in segment earnings reflects the impact of higher commodity metals and other material costs, higher manufacturing costs and costs associated with the relocation of the centerfire operations to Mississippi.

(C) WOC News

 

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