Price increases drive sales growth! 2022 report cards of BASF, Dow, LG Chem, Borouge, etc. announced

Recently, chemical companies such as BASF, Dow, Wacker Chem, Eastman, Borouge, LG Chem and other chemical companies have successively announced their 2022 financial reports or preliminary data. The sales growth of many companies has benefited from the increase in selling prices.

BASF's sales are expected to reach 87.327 billion euros, an increase of 11% year-on-year;

Dow's net sales were US$56.9 billion, a slight year-on-year increase;

LG Chem's sales were approximately US$41.29 billion, a year-on-year increase of 21.8%;

Eastman's sales were US$10.58 billion, a year-on-year increase of 1%;

Wacker Chemie’s sales were about 8.21 billion euros, a year-on-year increase of 32%;

Borouge sales were $6.7 billion, up 8.2% year-on-year.

BASF: Sales increased by 11% year-on-year, net income is expected to be negative

BASF Group released preliminary data for the full year 2022: sales are expected to reach 87.327 billion euros, an increase of 11% year-on-year; net income is expected to be negative 1.376 billion euros, significantly lower than the same period last year (2021: 5.523 billion euros). Amid lower volumes, BASF's sales growth was mainly due to higher prices and positive currency factors.

The significant decrease in BASF's net income was mainly due to the fact that its net income included a non-cash impairment of the Wintershall Dea stake mainly due to the loss of physical influence and economic expropriation of Wintershall Dea's exploration and production activities in Russia was cancelled. The company's equity investment in Russia has been reassessed and impairments have been made for its European gas transportation business, including a full impairment of its equity investment in Nord Stream.

In 2023, BASF will expand its product portfolio with a low carbon footprint and has committed to offering circular solutions for every major series of products by 2025. At the same time, technological optimization measures continue to be prioritized in order to reduce CO2 emissions generated during the production process.

Dow: Net sales up slightly

In 2022, Dow's full-year net sales will be $56.9 billion, up slightly from $56.0 billion in 2021. GAAP net income was $4.6 billion and operating earnings before interest and taxes (EBIT) was $6.6 billion, both down from 2021. Among them, Dow's net sales in the fourth quarter were US$11.9 billion, a year-on-year decrease of 17%, mainly due to the slowdown in GDP growth and customers reducing inventory.

Despite the challenging second half of the year, Dow continued to advance its "Decarbonize and Grow" strategy and continue to meet customers' growing demand for innovative and more sustainable solutions. In 2023, Dow will implement cost savings, increase productivity and other measures, focus on obtaining cash flow, and at the same time execute strategic priorities to achieve long-term, sustainable profitable growth.

LG Chem: Sales hit another record high

In 2022, LG Chem's sales will be 51.8649 trillion won (approximately US$41.29 billion, including LG New Energy), a year-on-year increase of 21.8%; operating profit will reach 2.9957 trillion won (approximately US$2.385 billion), a year-on-year decrease of 40.4%. LG Chem's 2023 sales target is 32.2 trillion won (about 25.641 billion US dollars, excluding LG new energy).

LG Chem will focus on petrochemicals, advanced materials, and life sciences. By promoting the low-carbonization of existing products in the petrochemical department, strengthening high value-added businesses, and cultivating new sustainability businesses; and increasing shipments of cathode materials in the advanced materials department by 50% A series of measures such as the acquisition of AVEO by the life science department to maximize the synergy effect of the global business continue to stabilize the growth tone of the company as a whole.

Eastman: Sales revenue up 1%

In 2022, Eastman's annual sales revenue will be US$10.58 billion. Compared with the comprehensive financial performance in 2021, the overall sales revenue will increase by 1%. This was driven by a 14% price increase more than offsetting a 3% volume/mix decline, as well as an 8% and 2% headwind from divestitures and foreign exchange, respectively. That reflects Eastman's aggressiveness in offsetting soaring raw material and energy prices and the strength of its business model.

Among them, in the fourth quarter of 2022, due to the rapid spread of the new crown epidemic, intensified destocking efforts in the Chinese market, and a sharp drop in demand, Eastman's sales revenue fell by 12%.

Despite approximately $1.3 billion of inflationary pressure from rising raw material, energy and distribution costs, Eastman's circular technology platform has made significant progress in 2022, strengthening its position in the circular economy. In 2023, Eastman will restore the spread through strategies such as cost reduction and price control. It is expected that the adjusted earnings per share in 2023 will increase by 5% to 15%, and the operating cash flow will increase to about 1.4 billion US dollars.

Wacker Chemie: Profit hits record high

Wacker Chemie’s sales and profits in the 2022 fiscal year hit another record high: total sales of approximately 8.21 billion euros, an increase of 32% compared to 2021; full-year profits in 2022 amounted to approximately 1.29 billion euros (2021: 828 million euros). Year-on-year increases in product prices were the main contributor to this growth, and exchange rate effects from a stronger U.S. dollar also had a positive impact.

In 2022, due to higher product prices, all WACKER business units will achieve significant sales growth, in which the polysilicon business is particularly prominent. Thanks to the extremely favorable price of polysilicon for solar cells, WACKER's polysilicon business unit achieved annual sales of 2.28 billion euros, a year-on-year increase of 49%.

In the future, WACKER will continue to insist on optimizing the production system, actively expand more ways that are conducive to the circular economy, create a green production base, and help achieve carbon neutrality.

Borouge; revenue up 8.2%

Borouge's revenue in 2022 is $6.7 billion, an increase of 8.2% compared to 2021; full-year adjusted EBITDA closes at $2.6 billion; annual profit of $1.4 billion is in line with market expectations, demonstrating Borouge's business Adaptability and efficiency.

The increase in total revenue was due to a 14.9% increase in total polyolefin sales volume; total production capacity increased by 10% year-on-year, which played a supporting role in the increase in sales volume. After the completion of Borouge PP5 (fifth polypropylene production plant) capacity increase construction, it has brought a huge increase of 500,000 tons to the annual production capacity.

Borouge predicts that the demand for polyolefins in the Asia-Pacific and Middle East markets will remain stable, sales will return to a state equal to production capacity, and economic activities in China will also recover. At the end of 2022, Borouge will further expand its renewable resource recycling strategic partnership in the Middle East and North Africa and the Asia-Pacific region to broaden its recyclable polyolefin product line.

According to the United Nations, the world economic growth rate in 2023 is expected to drop from an estimated 3.0% in 2022 to 1.9%. It can be seen from the financial reports of major companies that carbon reduction, cost reduction, and sustainability are still the focus of the development of the global petrochemical market. Many companies have chosen healthy premiums to ensure profitable growth.