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Decline in Q1 sales at Westlake Chemical
07
May '13
Westlake Chemical Corporation reported record net income for the three months ended March 31, 2013 of $123.3 million, or $1.84 per diluted share, on net sales of $864.6 million. This represents an improvement from the quarter ended March 31, 2012 net income of $87.8 million, or $1.31 per diluted share, on net sales of $1,034.9 million.

Net sales for the first quarter of 2013 decreased $170.3 million compared to the first quarter of 2012 mainly attributable to lower feedstock, ethylene and ethylene co-product sales volumes and lower sales prices for polyethylene and PVC resin. Ethylene and ethylene co-product sales volumes were lower primarily due to the planned turnaround and expansion of one of our Lake Charles, Louisiana ethylene units, which lasted 74 days.

Income from operations was $194.1 million for the first quarter of 2013 as compared to $145.6 million for the first quarter of 2012. Income from operations for the first quarter of 2013 benefited primarily from improved olefins and vinyls integrated product margins predominantly due to lower feedstock and energy costs as compared to the first quarter of 2012.

First quarter 2013 net income of $123.3 million, or $1.84 per diluted share, increased from the $95.3 million, or $1.42 per diluted share, reported by the Company in the fourth quarter of 2012. First quarter 2013 sales of $864.6 million increased $63.6 million compared to sales of $801.0 million in the fourth quarter of 2012. The increase in sales was largely due to higher sales prices for most major products and an increase in building products and PVC resin sales volumes.

First quarter 2013 income from operations of $194.1 million increased by $37.9 million over the income from operations in the fourth quarter of 2012 of $156.2 million. The increase in income from operations was primarily due to higher sales prices for most major products and lower feedstock costs. The increase was partially offset by the lost production, and the expensing of approximately $19.9 million of unabsorbed fixed manufacturing costs and other costs associated with the turnaround and expansion of the ethylene unit at our Lake Charles complex.

Albert Chao, President and Chief Executive Officer, said, "We are pleased to report record earnings in the first quarter of 2013. We continue to benefit from a globally advantaged energy and feedstock position resulting from North American shale gas and oil production. Our integration strategy, which includes additional ethylene, chlor-alkali and PVC resin capacity, and our recently announced specialty pipe acquisition are expected to significantly improve the cost and market position of our Vinyls segment and meaningfully add to the earnings potential of our Company."

EBITDA (earnings before interest expense, income taxes, depreciation and amortization) of $232.9 million for the first quarter of 2013 increased $50.5 million compared to EBITDA of $182.4 million for the first quarter of 2012. EBITDA for the first quarter of 2013 increased $41.9 million compared to the $191.0 million reported in the fourth quarter of 2012.

Net cash provided by operating activities was $116.3 million in the first quarter of 2013. Capital expenditures for the first quarter of 2013 were $150.8 million. As of March 31, 2013, our cash, cash equivalents and current marketable securities totaled $872.8 million, and our long-term debt was $763.8 million.

Westlake Chemical


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