DuPont beats profit estimates, launches USD5 bln share buyback plan

DuPont de Nemours topped Wall Street expectations for third-quarter profit as increased pricing and strong demand for its electronics and other industrial products helped the company beat mounting costs, sending its shares up nearly 6%, said Reuters.

The industrial materials maker also announced a new USD5 billion share repurchase program and said it would retire USD2.5 billion in long-term debt.

Double digit revenue jump in select segments, including water and auto adhesives, as well as an 8% hike in pricing helped offset the inflationary headwinds, DuPont Chief Executive Officer Ed Breen said on a post-earnings call.

The company has been grappling with rising costs for raw materials and energy due to decades-high inflation that was prompted by the pandemic and now intensified by Russia's invasion of Ukraine.

It expects cost to rise to about USD800 million in the year from its previous estimate of USD700 million, mainly due to higher energy prices in Europe.

But the cost pressures would subside heading into 2023, as raw material prices have started to normalize, the company said.

Sales from the electronics and industrial unit, one of the company's highest revenue generating segments, rose 2.9% to USD1.51 billion in the reported quarter, while the water and protection segment raked in USD1.53 billion, up nearly 10% from a year earlier.

DuPont's revenue rose to USD3.3 billion in the three months ended Sept. 30, compared with analysts' average estimate of USD3.2 billion.

We remind, DuPont has terminated its USD5.2bn deal from November 2021 to acquire Rogers Corp as the companies have been unable to obtain timely clearance from all the required regulators. DuPont is paying Rogers a termination fee of USD162.5m, it said in a brief statement late on Tuesday. The companies had not been able to obtain approval from regulators in China, officials said previously.
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Prospects for fourth-quarter earnings at South Korea’s petrochemical companies remain bleak despite their efforts to cut production rates and diversify portfolio to beat industrial downturn, said Pulsenews.

Spread on ethylene prices averaged at USD180 per ton in the third quarter, about 35 percent lower than USD278 in the first quarter, according to the petrochemical industry. This is a 46 percent decline from USD335 in the third quarter of last year. The spread is the price of ethylene minus naphtha, and usually USD300 is considered the break-even point.

Ethylene spread has been falling as naphtha prices remained high amid rising global crude prices. In contrast, demand for petrochemical product has weakened due to slowing global economy and higher raw material costs.

Petrochemical companies are faced with the worst conditions as demand deteriorates amid slowing global economy, according to an analyst at Heungkuk Securities Co.

Kumho Petrochemical Co. reported sales of 1.89 trillion won (USD1.4 billion) in the third quarter and operating profit of 230.5 billion won, off 15.6 percent and 63.1 percent, respectively, from a year ago. By sector, synthetic rubber operations post an operating profit of 84 billion won, 62.2 percent lower than a year ago. It reported an operating loss of 6.2 billion won due to a decline in demand for home appliances.

Lotte Chemical Corp. also posted an operating loss in the third quarter. Losses could continue in the fourth quarter as more products will be processed using crude that was purchased at higher prices, a Heungkuk Securities analyst said.

Korea Petrochemical Ind. Co. reported an operating loss of 60.1 billion won in the third quarter with sales down 25.46 percent.

LG Chem Ltd. And Hanwha Solutions Corp. managed to weather the slump with their electric vehicle battery and solar power businesses.

LG Chem’s third-quarter operating profit rose 23.9 percent from a year ago to 901.2 billion won and sales was 33.8 percent higher at 14.18 trillion won. Hanwha Solutions posted sale of 3.37 trillion won and an operating profit of 348.4 billion won in the third quarter, up 30.4 percent and 95.3 percent than a year ago, respectively.

Green businesses helped to offset some of the deterioration in their mainstay petrochemical operation.

Petrochemical companies, such as LG Chem and Korea Petrochemical, are using this down period to carry out maintenances of their facilities to adjust output until market conditions recover.

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Italy's efforts to secure financing to keep an Italian oil refinery owned by Lukoil up and running despite new sanctions on Russia kicking in next month have hit obstacles, three people close to the matter said, said Reuters.

Lukoil's ISAB refinery in Sicily stands to be hit by an embargo on seaborne Russian oil that comes into effect on Dec. 5, crippling a plant that accounts for a fifth of Italy's refining capacity.

Industry Minister Adolfo Urso on Tuesday said it was necessary to keep ISAB in business after Dec. 5 and called a meeting on Nov. 18 with company representatives. On the same day, unions have called for eight-hour strike action in the industrial area where ISAB operates.

The plant has had to rely solely on Russian oil provided by Lukoil after its creditor banks halted financing and stopped providing guarantees needed to buy oil from alternative suppliers.

Lukoil is not under sanctions, but ISAB suppliers and lenders had been wary of dealings with a Russian entity following the Ukraine conflict.

The Italian government last month issued a "comfort letter" to reassure creditor banks and suppliers about ISAB. It also held talks with representatives from the country's top two banks, Intesa Sanpaolo and UniCredit, over financing for ISAB guaranteed by state-owned export credit agency SACE.

The comfort letter was one of several conditions set by lenders to evaluate potential funding, one of the people said, adding that finding a prospective buyer for the refinery was also a key element in any plan for the banks to agree to.

A sale to non-Russian buyers would avert the closure of the ISAB plant, which directly employs some 1,000 workers.
However the refinery owner Litasco, a Lukoil subsidiary, last week rejected a bid from U.S. fund Crossbridge and commodities trader Vitol.

At present, conditions are not in place for the financing to advance, the people said, leaving ISAB's future in doubt.
Lukoil could provide temporary funding for ISAB, based on the minutes of a ministerial meeting held on Oct. 17 to discuss ISAB financing.

Rome is also considering buying a minority stake in the refinery to protect Italian interests, one of the sources said.
Talks with Crossbridge are not over, a third source close to the matter separately said.

We remind, Italian authorities have provided Lukoil with a "comfort letter" to help a refinery it owns in Sicily get bank financing to buy non-Russian oil and remain operational. The move is aimed at staving off worries that Lukoil's ISAB refinery, which accounts for around 20% of Italian refining capacity, stops working due to an embargo on seaborne Russian oil that comes into force on Dec. 5. ISAB has been forced to rely solely on Russian oil after creditor banks halted financing and stopped providing guarantees needed to buy oil from alternative suppliers.
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Exxon Mobil said it was dealing with an "operational matter" at its Fawley oil refinery in Britain, according to the plant's Twitter page, said Reuters.

The oil major did not provide any further details of the problem, but said its teams were addressing the situation.

We remind, ExxonMobil Corp agreed to sell its Billings, Montana, refinery and related pipeline properties to Par Pacific Holdings Inc for USD310 MM. The sale ends a years-long effort by the U.S. oil giant to further reduce its refining footprint and concentrate production on plants along the U.S. Gulf Coast and in the Midwest. It also has been selling oil producing properties to boost returns.

Exxon Mobil Corporation is an American company, one of the largest oil companies in the world, one of the largest corporations in the world in terms of market capitalization. The company's headquarters is located in Irving, a suburb of Dallas, Texas.

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SK picglobal, a market leader for propylene oxide and its derivatives including propylene glycol, and INEOS Styrolution, the global leader in styrenics, have signed a memorandum of understanding (MOU) yesterday giving INEOS Styrolution access to renewable styrene monomer (“SM”) produced from SK picglobal’s SM plant located in Ulsan, South Korea, sai dthe company.

This agreement is an extension to INEOS Styrolution’s efforts in creating a circular economy for both polystyrene (PS) and acrylonitrile butadiene styrene (ABS) in Asia. Under this MOU, SK picglobal will produce and supply renewable SM to INEOS Styrolution upon obtaining ISCC PLUS certification, estimated to be within 2023.

INEOS Styrolution has committed to saving one million tonnes of CO2 emissions by 2030 and selling 500kt of ECO products in 2030; and achieving net zero emissions by 2050.

"This agreement with SK picglobal is the right step to helping INEOS Styrolution achieve those goals and demonstrates our commitment to a sustainable future across all of our market segments,” said Arndt Kotyczka, Vice President, Global Styrene Monomer, INEOS Styrolution. “This renewable SM source will enable us to offer recyclable, sustainable products with the exact same quality and performance that customers have come to expect.”

"We are excited to be working with INEOS Styrolution, a company that shares our vision of getting to a world where nothing is wasted," said Ki Don Won, CEO of SK picglobal. "Increasingly, customers are demanding sustainable practices across the product supply chain and life cycle. The feedstocks we manufacture reduce waste, offset the need to produce virgin materials and help manufacturers achieve carbon neutral goals as we transition to a circular economy."

We remind, Ineos Styrolution has developed what officials claim are the world's first fully bio-attributed ABS resins. .
The new ECO B line is part of Ineos Styrolution's Terluran-brand ABS portfolio. Officials with Ineos Styrolution in Frankfurt, Germany, said in a news release that the new grades complement previous mechanically recycled Terluran ECO materials.

SK picglobal, a joint venture with SKC and the Kuwaiti national petrochemical company PIC (Petrochemical Industries Company), is the leading global propylene oxide and its derivatives propylene glycol supplier. With world class product quality and more than 30 years of operation experience, the company supplies PO, PG and SM to a broad range of industries, including urethane foam, surfactant, health care, personal care, flavors & fragrance, food & beverage, pharmaceutical and etc. SK picglobal employs approximately 300 people and operates production sites in Ulsan, Republic of Korea.
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