The third quarter performance of chemical giant dropped precipitously

In the face of the increasingly severe external environment, such as the slowdown of global economic growth, the aggravation of trade disputes and the fall of energy prices, the third quarter performance of many foreign chemical giants declined significantly. However, we can also see the differences of these corporate strategies from the company's financial statements. Let's first look at the third quarter's performance. 1. Global energy prices fell. Dow Q3's net income fell 67% year on year. Dow announced its third quarter results in 2019. Operating profit decreased 32% after quarterly adjustment due to the increase of chemical inventory used to manufacture plastics and the squeeze of profit margin due to weak demand. In the three months ended September 30, the company's net income fell 67% year-on-year to $333 million, or 45 cents per share, compared with $1.01 billion or $1.36 per share in the same period last year. Excluding special items, the company's third quarter operating profit was $0.91 per share, compared with $1.34 a year earlier.

Operating EBIT fell 31% to $1.1bn in the third quarter from a year earlier, reflecting squeezed margins and the impact of falling production in Argentina, according to the results. But these factors are partly offset by savings from cost synergies and new capacity along the Gulf Coast. Operating EBIT increased by $58 million due to lower planned maintenance spending in the industrial solutions business and higher margins in the packaging and specialty plastics businesses. In addition, Dow Chemical's net sales in the third quarter reached US $10.8 billion, down 15% year-on-year, mainly driven by the fall in local prices caused by the fall in global energy prices. Sales fell 2% year-on-year, with demand growth for packaging materials, polyurethane and silicone applications offset by weak sales of hydrocarbon by-products. In the third quarter, the company had capital expenditure of $472 million and free cash flow of $1.3 billion. $600 million was returned to shareholders, including $500 million in dividends and $100 million in share repurchases. The loss on equity amounted to US $44 million, while the return on equity for the same period of last year was US $135 million. The main reason for the loss was the poor performance of the joint venture in Kuwait due to the compression of the profit margin of MEG and PE.

The EBIT of BASF in the third quarter excluding special projects decreased by 24% compared with the same period last year. The sales volume of BASF Group in the third quarter of 2019 was EUR 15.2 billion, slightly lower than the same period last year. EBIT excluding special items was EUR 1.1 billion, down 24% from the same period last year, mainly due to lower prices in the two business areas of materials and chemicals. As expected, the price of isocyanate fell sharply; in addition, the profit of cracking products decreased due to the planned maintenance of steam cracking unit. All of the above factors have a significant negative impact on the earnings of the two major business areas of materials and chemicals. Market uncertainties and customers' cautious buying behavior also partly contributed to the decline. Demand in key customer areas has not recovered. However, BASF strongly maintained sales at the same period last year, thanks to increased sales in the agricultural solutions and surface treatment business. Dr. Martin Bruder m ü ller, chairman of BASF Europe's executive board, said at the financial performance conference in the third quarter of 2019: "the company's downstream business unit has successfully achieved a performance significantly higher than that of the same period last year in a difficult market environment."

Weak chemical market Saudi Basic Industry's third quarter net profit fell 86% on the morning of October 27 local time, SABIC, a global chemical giant, released its third quarter operating results at its headquarters in Riyadh. In the third quarter, SABIC's sales revenue was 33.69 billion Riyals (about 63.378 billion yuan), a year-on-year decrease of 23%; its net profit was 830 million Riyals (about 1.561 billion yuan), a year-on-year decrease of 86%. You self al benyan, SABIC's chief executive, said in a statement that the slowdown in global economic growth, the increase in new capacity and the continued decline in oil prices in the third quarter made the business environment more challenging, while increasing downward pressure on chemical product prices. Youself al benyan said that from the current market situation, the fourth quarter data will be roughly similar to the third quarter data, and the market outlook for 2020 is still challenging.

Huntsman's third quarter performance fell sharply. Its full year profit may fall by as much as 20%. Huntsman, an American chemical giant, said on October 25 that the sales growth of MDI in the third quarter could not offset the lower sales price, while the sales and profit of Pu Department decreased year on year. Two other sectors - high performance products, advanced materials and textile effects - also saw year-on-year sales and revenue decline in the quarter. Huntsman's smallest sector textile effect has also been affected by the weak market and Sino US trade war. Its sales volume and selling price have also declined. 5 Walker's sales volume rose in the third quarter, while ebida fell 34% compared with the same period last year. Wacker chemical released the latest financial report that the company's sales volume in the third quarter was 1.26 billion euros, an increase of 2% compared with the same period last year. EBIT TDA) was EUR 270 million, an increase of 13% over the same period last year. Wacker chemical said the main reason for the significant increase in EBITDA was a special benefit. In September this year, the company received insurance compensation of about 110 million euros due to an accident at the Charleston production base in 2017. If this income is not included, Wacker chemical's EBITDA is EUR 160 million, a decrease of 34% compared with the same period last year.

Wacker chemical has previously adjusted its full year performance forecast. Currently, the company expects its sales volume to remain at the previous year's level, while its EBITDA will be reduced by about 30% compared with the same period last year. 6 sales in Clariant's China market dropped by 9%. Clariant recently announced that the total sales from continuing operations in the first three quarters of 2019 amounted to CHF 3.272 billion, while the sales in the first three quarters of 2018 amounted to CHF 3.278 billion. Thanks to the double rise in volume and price, organic sales increased by 3% in local currency, and a steady increase in Swiss franc. In the first three quarters, most regions contributed to sales growth in local currency terms. Latin America, the Middle East and Africa each grew 11%. Despite a 9% decline in the Chinese market, sales in Asia continued to grow well, up 4%. Sales in Europe grew by 2%, while the North American market contracted by 4%. The improvement in sales performance in the first three quarters of 2019 is due to the growth of catalyst and natural resources business.

Thanks to the positive contribution of petrochemicals and syngas, sales in the catalyst business increased by 10% in local currency terms. Thanks to the significant expansion of oil and mining services and a certain degree of growth in functional minerals, sales in the natural resources business increased by 4% in local currency terms. Affected by the weakness of the electronic and electrical industry, the sales volume of additive business decreased. 7. On October 28, local time, the net income of covestro plummeted by 70%. After the third quarter's financial report was released by covestro, the stock suffered a setback, which wiped out the value accumulated for a month. In the third quarter of 2019, keschuang said that its core sales volume increased by 5.3% over the same period of last year "in a continuously challenging economic environment". But in the past three months, the group's sales have fallen by 14.6% to 3.2 billion euros, as expected by kostron. EBITDA in the third quarter was € 425 million as profit margins squeezed by lower prices, down 50.5% from the same period last year. Net income decreased to EUR 147 million, down - 70.4% year on year, and free operating cash flow (focf) was EUR 243 million, down - 58% year on year. This is mainly due to the decrease in cash flow from operating activities and scheduled investments.