Dow achieves improved financial performance in Q2

31 Jul '09

3 min read

Dow Reports Second Quarter Results—— Accelerated cost reductions, faster synergy achievements and volume gains achieve sequential improvement in sales and business operating results despite weak U.S. and European economies.

Second Quarter 2009 Highlights
- Dow reported a loss of $0.47 per share. Excluding certain items(1) and discontinued operations in the quarter, the Company earned $0.05 per share, driven by favorable volume trends, management's accelerated cost interventions and the Company's ability to maintain price from the prior quarter.

- The Company is ahead of its commitments to reduce structural costs, with a decrease of more than $375 million in costs in the quarter and more than $600 million year to date due to ongoing cost reduction and restructuring efforts, as well as cost synergies achieved as a result of the acquisition of Rohm and Haas. To date, the Company has achieved more than 70 percent of its 12-month cost synergy run rate goal, which began on April 1.

- Volume and price were each down 20 percent on a pro forma basis(2) versus the year-ago period. Sequentially, volume increased five percent with growth of at least 20 percent in Electronic and Specialty Materials, Coatings and Infrastructure, and Performance Systems.

- Dow's global operating rate improved seven percentage points to 75 percent versus the prior quarter, driven by double-digit volume growth (compared with pro forma sales) in Asia Pacific; India, Middle East and Africa (IMEA); and Latin America.

- At a company level, EBITDA(3) excluding certain items improved sequentially by 64 percent on a pro forma basis. This was driven by increases in the Advanced Materials and Performance Products and Systems segments, which were up by $634 million; and Basic Plastics, which improved by $284 million. Health and Agricultural Sciences decreased by $238 million due to declines in agricultural chemicals.

Comment
Andrew N. Liveris, Dow's chairman and chief executive officer, stated:
“Dow achieved improved financial performance and successfully reached a number of significant transformational milestones in the second quarter inclusive of announced divestitures and improving the balance sheet. In addition, business results improved sequentially, reflecting volume growth, our ability to hold price in the quarter as well as the acceleration and realization of our cost reductions and synergies. The actions we have taken thus far represent focused and precise steps as part of our transformation and the long-term goals we have set for our Company. We will also continue to manage our business with the same dedicated focus and are confident that we are on track to position Dow as an earnings growth company."

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