In the third quarter of 2020, Olin Corp. posted a net loss due to USD700 million impairment charges and weaker chemical results.
Net loss was at USD736.8 million in the period. Net sales went down by 8.8% year-on-year to USD1.4 billion. Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) slumped by 33% year-on-year to USD195.5 million due to the weaker results of chlor-alkali, vinyl, and epoxy, although it was offset by stronger Winchester earnings.
In the period, chemical volumes and margins significantly improved from the previous quarter. Sales for the chemicals businesses increased sequentially by around 17%, following a monthly gradual increase since the low in April.
For chlorine and almost all chlorine derivatives, sequential prices improved.
Sales for chlor alkali products and the vinyl segment went down by 14% year-on-year to USD755.1 million. Segment adjusted EBITDA slumped by 36% year-on-year to USD149.9 million due to lower ethylene dichloride and caustic soda pricing and lower volumes.
Epoxy sales slipped by 7% year-on-year to USD476.1 million while adjusted EBITDA plunged by 24% to USD38.8 million on the back of lower product prices and lower epoxy resin volumes, partially offset by lower raw material costs and operating costs.
Sales of Winchester jumped by 9% year-on-year to USD206.4 million while the segment’s adjusted EBITDA soared by 66% to USD31.7 million on the back of higher commercial ammunition volumes and pricing.
Looking ahead, the margin is estimated to improve in the fourth quarter due to the recent price increases for chlorine, epoxy resins, bleach, ethylene dichloride, and chlorinated organics. However, volumes will likely be challenged based on customer year-end inventory reductions and Olin selectively selling less into poor quality markets, which would offset the positives from driving price increases.
