COLUMBUS, OH — Hexion Inc. announced results for the third quarter ended Sept. 30, 2018. “Our positive momentum continued in the third quarter of 2018, reflecting strong results in our base epoxy resins, phenolic specialty resins, and forest products businesses,” said Craig A. Rogerson, Chairman, President and CEO. “Our year-to-date Segment EBITDA gains of 29% also reflect the positive impact of our recent structural cost-reduction initiatives and the growth in our waterborne coatings business as we successfully brought on additional capacity during the third quarter. In addition, our year-to-date operating cash flow improved by $156 million compared to the prior year, and we remain focused on generating improved cash flow through year-end 2018.”
Rogerson added, “We continue to experience solid demand in our global forest products business and strong market fundamentals in our base epoxy resins business. We expect strength in these businesses to persist for the foreseeable future and to support strong 2018 results over the prior year. Additionally, we expect the introduction of new products and government supported investment in the China wind energy market to drive improvement in our epoxy specialty business in 2019.”
Third Quarter 2018 Results
Net sales for the quarter ended Sept. 30, 2018, were $952 million, an increase of 4% compared with $914 million in the prior-year period. The increase in reported net sales was driven by the pass-through of higher raw material costs and pricing actions primarily in the base epoxy resins business.
Segment EBITDA for the quarter ended Sept. 30, 2018, was $128 million, an increase of 33% compared with the prior year period. Segment EBITDA in the third quarter of 2018 increased by $33 million, or 35%, when adjusted for divestitures. Third quarter 2018 results reflected cost reduction actions and improved margins primarily in the company’s base epoxy resins, phenolic specialty resins, and global forest products businesses
In the first nine months of 2018, the company achieved $37 million of cost savings related to its restructuring program announced in the fourth quarter of 2017. At Sept. 30, 2018, Hexion had approximately $17 million of total in-process savings, the majority of which it expects to realize by year-end 2018.
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