PPG reports 4Q 2023 and full-year 2023 financial results

PPG reports 4Q 2023 and full-year 2023 financial results

PPG team delivered solid year-over-year sales growth, strong adjusted earnings growth and record operating cash flow, said the company.

The breadth and diversity of our business portfolio was a key driver to our record fourth quarter performance, as we benefited from solid volume growth in China, demand stabilization in Europe and continued growth in several key end-use markets such as aerospace, automotive original equipment manufacturer (OEM) and protective coatings.

We made strong progress on returning to our historic segment margin profile while delivering segment earnings growth of 30% and an aggregate segment margin improvement of 260 basis points, marking the fifth consecutive quarter of year-over-year margin improvement. Additionally, our earnings growth and working capital management resulted in strong cash generation in the quarter and record operating cash flow of over $2.4 billion for the year. We ended the year with a strong balance sheet that, coupled with our legacy of solid cash flow, provides us with shareholder value creation opportunities going forward.

Looking at the full year, in addition to our record financial performance, we successfully implemented various strategic initiatives to strengthen the company, including key actions to position PPG for higher organic growth. We also executed on our ongoing portfolio review leading to the divestitures of both our European and Australian Traffic Solutions businesses and the recently announced strategic alternatives review of the silicas products business. Finally, we have continued our heritage of rewarding our shareholders with our 124th consecutive year of dividend payments, including 52 consecutive years of dividend increases.

Looking ahead, while global industrial production remains at low absolute levels, we expect that demand for our businesses in China will continue to improve. In Europe, we believe that economic activity will stabilize in 2024 at current levels. In the U.S., we anticipate that economic conditions will remain subdued during the first half of 2024, and in Mexico, which is now our second largest country in terms of total net sales, we expect strong momentum to continue. From a PPG perspective, we plan to deliver volume growth in 2024 by executing on our key strategic growth initiatives and fully capitalizing on continued demand in several areas, including aerospace and Mexico, which will also benefit from cross-selling initiatives through our concessionaire network.

We remind, PPG announced that Hugh Grant, 65, PPG independent lead director, has informed the board of directors of his decision to end his tenure as independent lead director, effective Oct. 1, and retire from the board at the end of the year. Grant joined the board in 2005 and has served on the Nominating and Governance Committee and the Human Capital Management and Compensation Committee, serving the last nine years as independent lead director.

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Olin Q4 earnings down on pricing, beat estimates

Olin Q4 earnings down on pricing, beat estimates

Olin Corp. (Clayton, Missouri) reported fourth-quarter 2023 net income of $53 million, down 77% year over year, on sales of $1.615 billion, down 18%, said the company.

Adjusted earnings per share came to 27 cents, down from $1.49 in the year-ago quarter, but ahead of the analysts' consensus of 18 cents, as compiled by S&P Capital IQ. The company attributed the results in part to lower product pricing for caustic soda, lower pricing in the epoxy segment, and to the shutdown of cumene and bisphenol A capacities.

"In fourth quarter 2023, we executed a 'value accelerator initiative' designed to halt the decline in our electrochemical unit [ECU] values and accelerate a favorable inflection point for our chlor-alkali products and vinyls business," said Scott Sutton, Olin's chairman, president and CEO. "We are seeing success with our 'value accelerator initiative' but expect to continue to limit our market participation through February 2024, as we remain disciplined in our approach to ECU values."

Sutton said he expects the initiative to drive sequential improvement in results. "Considering the ongoing difficult global economic environment and our 'value accelerator initiative,' we expect first quarter 2024 results from our chemical businesses to be slightly higher than fourth quarter 2023 levels." The Winchester ammunition business will remain strong, he added. "Overall, we expect Olin's first quarter 2024 adjusted EBITDA to improve by approximately 10% from fourth quarter 2023 levels."

We remind, Olin shares rose more than 3% in afterhours trading on Thursday after its Q4 adjusted earnings beat its earlier guidance. Olin reported $210.1 million in adjusted earnings before interest, tax, depreciation and amortization (EBITDA). Earlier, it expected Q4 adjusted EBITDA to be in the $200 million range. Olin expects Q1 adjusted EBITDA to rise 10% over Q4 levels, reaching $231 million.

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Sasol anticipates continued market headwinds in H2 2024

Sasol anticipates continued market headwinds in H2 2024

Sasol Ltd. (Johannesburg) said it anticipates continued pricing and demand volatility in its chemicals business during the second half of its fiscal year, which ends on June 30, 2024, said the company.

In a stock exchange announcement on Jan. 25 detailing its first-half production and sales metrics for the period ended Dec. 31, 2023, Sasol said global market sentiment and petrochemical markets “remain uncertain with the persistent muted demand and margin outlook for chemicals.”

The company said its first-half performance “continued to be impacted by a volatile macro-economic environment, with weaker oil and petrochemical prices, unstable product demand and continued inflationary pressure.”

Sasol’s chemicals business was impacted by challenging market conditions, with macroeconomic weakness, especially in China and Europe, and customer destocking negatively impacting global demand, it said. Sasol’s average sales basket price for chemicals in the first half of the financial year was down 24% year over year, to $1,194 per metric ton, with the decrease driven by a combination of lower crude oil, feedstock and energy prices, as well as weak market demand, it said.

We remind, Sasol North America, a subsidiary of the renowned Sasol conglomerate, recently undertook an unexpected shutdown of its olefins production facility located in Lake Charles. The abrupt halt in operations was necessitated by the adverse impact of freezing temperatures in the region. Commencing on January 15, the company made the decision to suspend the production of key elements such as ethylene, ethylene oxide, propylene, and ethylene glycol, a hiatus expected to extend until the conclusion of the current week. The extreme weather conditions not only disrupted Sasol's industrial operations but also posed challenges to personnel and logistics across the affected region.

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Russian Black Sea oil refinery fire extinguished

Russian Black Sea oil refinery fire extinguished

MRC -- A fire at a Rosneft-owned export-oriented oil refinery in the southern Russian town of Tuapse overnight has been extinguished, local officials said.

The refinery is one of many energy infrastructure facilities hit by fire or drone attacks across Russia in the past week. "The vacuum unit was on fire. According to preliminary information, there were neither casualties nor injured," Sergei Boiko, the head of Tuapse district, said on the Telegram messaging app.

The plant's annual capacity is 12 MMt (240,000 bpd). It supplies fuel mainly to Turkey, China, Malaysia and Singapore. The plant produces naphtha, fuel oil, vacuum gasoil and high-sulphur diesel. The cause of the blaze and the scale of the damage were not immediately clear. A Rosneft representative was not immediately available for comment.

Unofficial Telegram channels showed pictures of the blaze and said drones had been responsible. Russian energy company Novatek on Sunday said it had been forced to suspend some operations at the huge Baltic Sea fuel export terminal and "technological processes" at its fuel-producing complex after a fire started by what Ukrainian media said was a drone attack.

Russian news agencies also quoted officials at the region's major airport in the seaside town of Sochi as saying it had suspended arrivals and departures. Crews and dispatchers were taking all precautions to ensure flight safety in the area.

We remind, the volume of jet fuel exports at risk of disruption after a suspected drone attack on a Baltic Sea terminal could be more than 20,000 bpd, much of it destined for Turkey, according to data from terminal owner Novatek. The company said on Sunday it had been forced to suspend some operations at the huge Baltic Sea fuel export terminal and "technological processes" at a nearby fuel-producing complex after a fire started by what Ukrainian media said was a drone attack.

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Rhine River water level slips further at key German waypoint

Rhine River water level slips further at key German waypoint

The Rhine River’s water level at a key waypoint hit a new low, risking the transit of fuel and other goods as Europe’s climate crisis exacerbates its energy-supply crunch, said Bloomberg.

The marker at Kaub, a particularly shallow point west of Frankfurt, briefly dropped to 30 centimeters (11.8 inches) earlier Monday before edging back up, the latest German government data show. It is forecast to fluctuate around 31-33 centimeters as the week progresses.

“The current water levels on the Middle and Lower Rhine are currently at an exceptionally low level for this time of year,” the Rhine Waterways and Shipping Authority, known as WSA, said in a statement. “They are the result of the lack of precipitation in recent weeks and months.”

The Rhine is western Europe’s most important river for the transport of fuel and other industrial goods. Many barges find it uneconomical to transit past Kaub when the water level there is at 40 centimeters or below. The marker is not the actual depth of the river, but rather a reference for navigability.

The WSA said it hasn’t imposed shipping restrictions, noting that when water levels are low, less cargo can be transported.

Last week, shipping company Contargo, which also operates terminals, said that a drop at Kaub to below 40 centimeters would prompt it to largely discontinue its barge business on the middle and upper Rhine. Neska Container Line B.V. said on Aug. 11 that its barges weren’t able to call at Cologne and Dusseldorf -- downriver from Kaub -- and that inland waterway barge handling would be possible again from around Aug. 19.

Chemical maker BASF SE later this year plans to put into service a new, low-water vessel that can haul 650 tons of cargo with the Kaub level at 30 centimeters, which the company said corresponds to a water depth of 1.6 meters (5.25 feet).

That’s significantly more than other tankers and about 25% of its capacity in average low water, BASF has said. For now, the company is using a vessel that can haul 200 tons of liquefied gases at 30 centimeters. The measured water-level at Kaub hasn’t been this low at this time of year since at least 1990, according to official data compiled by Bloomberg. Prior to November 2013, data are tallied on a daily, rather than intraday basis. In late 2018, the level fell as low as 24 centimeters.

Energy prices on the continent have soared as a heat wave bears down upon the region. Benchmark natural gas futures rose on Monday, while German year-ahead power jumped to a new record.

We remind, BASF and Inditex jointly announce a breakthrough in their efforts for boosting recyclability in the textile industry. With the launch of loopamid , a polyamide 6 (PA6, also known as nylon 6) made from 100 percent textile waste, BASF is providing the first circular solution for nylon apparel made entirely from textile waste.

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