Revenue exceeds 70 billion! Dow grew 21.62% year-on-year in the first quarter!
Recently, Dow's first-quarter financial report showed that the company's operating net profit was US$1.02 billion (about 6.6 billion yuan), or US$1.36 per share, which exceeded expectations of US$1.14. Revenue was 11.882 billion U.S. dollars (approximately RMB 77.2 billion), an increase of 21.62% over the same period last year, and exceeded the expected 11.09 billion U.S. dollars. Net sales of the materials and coatings division in the first quarter were US$2.1 billion, a year-on-year increase of 3%.
According to Generally Accepted Accounting Principles (GAAP), earnings per share were US$1.32; operating earnings per share were US$1.36, compared with US$0.59 in the same period last year. Operating earnings per share does not include the earnings of important items in the quarter of $0.04 per share, which involve restructuring costs and accelerating digitization expenditures.
Net sales were US$11.9 billion, an increase of 22% from the same period last year, mainly due to the increase in local prices in all operating segments, business units and regions. Net sales increased by 11% month-on-month, and all sectors and regions achieved growth.
Local prices increased by 19% year-on-year, mainly due to price increases in all operating sectors. The increase in prices of all operating sectors, business units and regions contributed to a 14% increase in overall prices from the previous month.
Sales were flat compared with the same period last year because of the impact of winter storm Uri on the Gulf Coast of the United States. The increase in demand in the packaging and specialty plastics sector was offset by supply constraints in the industrial intermediates and infrastructure sectors, functional materials and coatings sectors.
Equity income was 224 million U.S. dollars, an increase of 313 million U.S. dollars year-on-year, mainly due to the increase in the profit margins of the polyurethane and polyethylene of Sadara and the Kuwait joint venture.
GAAP net income is $1 billion. Operating profit before interest and taxes (EBIT) was US$1.6 billion, an increase of US$843 million year-on-year, thanks to increased profit margins in the packaging and specialty plastics segment, industrial intermediates and infrastructure segments.
Dow decided to spend US$1 billion on the US pension plan and announced that it would freeze the US pension plan for current employees until December 31, 2023. These measures and the subsequent readjustment of the U.S. pension plan effectively reduced the company’s payables to U.S. pensions by US$2.3 billion and reduced pension expenditures for the full year of 2021 by approximately US$200 million, including cuts in earnings.
Cash generated from operating activities (ie continuing operations) was US$228 million. Excluding $1 billion in voluntary pension expenditures, operating cash exceeds $750 million. The company continues to prioritize cash, resulting in a cash flow conversion rate of 76% in the past 12 months.
The shareholder dividend return for the quarter was $521 million.
The Sadara joint venture has successfully completed debt adjustments and is currently expected to achieve self-sufficiency in cash flow. It is expected to provide Dow with approximately US$350 million in cash in 2021.
Mr. Jim Fitterling, CEO of The Dow Company:
"The results of the first quarter showed the continued focus and flexibility of the Dow team. Our operating income and net profit were able to achieve chain and year-on-year growth. Winter storm Uri caused extraordinary damage to the entire industry. We responded quickly and quickly resumed facility operations within a week, and returned to the pre-storm operating rate at the end of the quarter. Despite supply constraints, we see that demand is growing as the economic recovery continues to expand, especially in packaging, End markets such as construction, transportation, electronics and consumer durables."
"In each of our operating segments, business units and regions, sales have increased, and prices have risen. Thanks to continuous cost control, our revenue performance has also contributed to profit in the case of further recovery in key end markets. In addition, our voluntary pension expenditure of US$1 billion further eased the debt situation. All in all, benefiting from the improvement of fundamental market fundamentals, we completed the first quarter with strong profit growth momentum. And will continue to focus on operational control."
Fitterling said: "Dow entered the second quarter with a good growth momentum. With continuous progress in vaccine distribution and tighter market fundamentals, we expect the economic recovery to expand and continue to benefit our businesses. We are The increase in short-term capital investment will further promote the growth of our consumer-oriented product portfolio. With our unique raw material flexibility, geographic coverage, favorable cost advantages, high cash generation capabilities, and high-growth end markets With its leadership in China, Dow is fully prepared to continue to create value in 2021 and beyond."
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