Dow records strong results as it preps for DuPont merger
In the dietary ingredients and food ingredients realm, Dow has a wide array of products, including Methocel line of texturizers and the Wellence line of oil reduction solutions. The company recently announced a capacity expansion at its Midland, MI plant to meet market demand for its Wellence line.
According to a letter in the journal Nature Biotechnology, Dow AgroSciences is a step closer to commercializing oil from canola plants bred to produce meaningful amounts of the coveted long-chain omega-3 fatty acids DHA (3.7%) and EPA (0.7%), which are currently only found in fish, fungi or microalgae. That ingredient would presumably be housed in the food-focused leg of the three legged stool that would be created in a merger with DuPont. The plan, which was announced last December and which is slated to close by the end of the year and which still must pass anti-trust review, would split the merged company, which would have combined market cap of about $122 billion (second only among chemical companies to BASF), into three separate segments focused on plastics and industrial chemicals, agricultural products and specialty products that would include food ingredients. The deal is seen as part of a merger tide sweeping the ag and chemical sectors that is a result of sliding commodity prices.
Earnings details
Dow recorded $2.61 earnings per share in its second quarter. The company reported record EBITDA of $4.2 billion, and record operating EBITDA of $2.5 billion. A big part of this was the $5 billion deal announced in March to split off the company’s chlorine business.
Sales were $12 billion, down 7% versus the year-ago period primarily driven by lower hydrocarbons and raw material prices and the impact from the Dow Chlorine Products divestiture.
Volume grew 2% on a reported basis and 4 percent excluding the impact of divestitures and acquisitions, reflecting broad-based, consumer-driven demand with gains across all geographic areas – Asia Pacific (up 7%); Europe, Middle East, Africa and India (EMEAI) (up 4%); Latin America (up 4%); and North America (up 3%). Regional highlights included Greater China (up 7%), Europe (up 6%) and the United States (up 4%).
