COLUMBUS, OH - Hexion Inc. announced results for the second quarter ended June 30, 2017.
“I’m excited to join Hexion and to capitalize on the opportunities in front of us,” said Craig A. Rogerson, Chairman, President and CEO. “We were pleased to post overall sales and volumes gains of 7% and 5%, respectively, compared to the prior year and adjusted for our recent divestitures. Results were highlighted by strong growth in our North American forest products business inclusive of our recently completed formaldehyde plants, which are expected to generate approximately $17 million of EBITDA in 2017. We also drove solid year-over-year EBITDA improvement in our oilfield proppants and base epoxy resins businesses in the second quarter of 2017. Our overall results reflected ongoing softness in our specialty epoxy resins business due to the slowdown in Chinese wind energy demand.”
Rogerson added: “We continue to execute our strategic growth and innovation programs highlighted by the recently announced expansion of our Edmonton research and development facility, which will focus on developing next-generation forest product resins aligned with our Ecobind™ growth platform and our European Technology Center. Finally, we expect Segment EBITDA to sequentially improve in the third quarter of 2017 reflecting our diversified portfolio. While our strong volumes and seasonal net working capital build impacted our liquidity in the first half of 2017, we expect, in aggregate, to be free cash flow positive in the second half of the year.”
Net sales for the quarter ended June 30, 2017 were $912 million, a decrease of 4% compared with $952 million in the prior year period. The decline in reported net sales was primarily driven by the impact of recent divestitures. Net sales increased 7% when adjusting for recent divestitures primarily reflecting volume gains in oilfield proppants, base epoxy resins and North American forest product resins businesses.
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