COLUMBUS, OH - Hexion Inc. recently announced results for the second quarter ended June 30, 2021. The company reported net sales from continuing operations of $852 million, an increase of 59% compared with $535 million in the prior-year period. Net income for the second quarter was $38 million, compared to a net loss of $42 million in the prior-year period. Total Segment EBITDA from continuing operations for the quarter ended June 30, 2021 was $160 million, an increase of $104 million compared with 2020, or 186%, reflecting strong gains across both the Adhesives and Coatings and Composites segments.
"Our strong second quarter 2021 results position us well to aggressively pursue our strategic actions that are focused on creating shareholder value, which includes a proposed public offering of Hexion Holdings Corporation's common stock later this year, in addition to the consideration of alternatives identified through the Company's ongoing strategic review," said Craig Rogerson, Chairman, President and Chief Executive Officer. "We were pleased to drive strong second quarter 2021 results as our Segment EBITDA increased by $104 million, or 186 percent, in the second quarter of 2021 versus prior year. While the impact of COVID-19 in the prior year period clearly impacted the year-over-year comparisons, Segment EBITDA also increased sequentially by $46 million, or 40 percent when compared to the first quarter of 2021 driven by sharply increased volumes, pricing actions to offset raw material inflation and strong secular demand across our diversified end markets. We continue to benefit from a significant percentage of customer contracts that allow for the contractual pass through of raw material costs. Within our Adhesives segment, we continued to capitalize on the strength in residential home building, while within our Coatings and Composites segment we saw the positive impact of steady pricing actions in our specialty and base epoxy businesses. Overall, this resulted in Segment EBITDA margins approaching 19 percent compared to approximately 11 percent in the prior year."
"Supported by a strong balance sheet, debt reduction remains a strategic priority. For example, we used a portion of the proceeds from the sale of our phenolic resins and European forest products businesses to repay $150 million of the EUR-denominated Senior Secured Term Loan in early May. Reflecting a strong second quarter, our liquidity totaled $646 million at quarter end. Due to our improved earnings and debt reduction, our net debt to Pro Forma EBITDA leverage ratio was 3.0 times as of the last twelve months ended June 30, 2021."
"We continue to strategically invest in our Adhesives segment through our site expansion in Portland, Oregon to support our ArmorBuilt fire resistant wrap. This new product greatly improves fire protection when applied to a substrate and helps protect critical infrastructure for electric utilities. Our new Brimbank, Australia facility is expected to come online in mid-2022 to provide fire resistant cladding materials for new commercial and residential buildings. Both investments are intended to meet our customers’ growing demand for solutions that provide more sustainable product attributes and support the greater utilization of wood to support climate change strategies."
“Looking ahead, we expect strong growth in earnings in the third quarter of 2021 versus the prior year as we are seeing broad-based strength throughout the portfolio, and while there is uncertainty in the fourth quarter due to potential customer manufacturing turnarounds and seasonality, we expect a strong fourth quarter of 2021 compared to the prior year. We remain focused on delivering earnings growth and making significant progress toward our potential value-creation strategies."
Learn more at www.hexion.com.