Midland, Michigan -- Dow Chemical Co. reported sales for Q1 2009 of 9087 million, compared with sales of $14 824 million in the same period of 2008. Net income for the quarter was $24 million, compared with $941 million for Q1 2008.
Speaking in a conference call 30 April, Andrew Liveris, Dow's chairman and ceo, said these results reflect the "demand destruction that continued into the first quarter -- balanced by strong results from Dow AgroSciences."
Liveris continued, "Inventory de-stocking appears to be over, so at least one major component of demand destruction is behind us. We are encouraged by the operating rate improvement that we have seen each month from December to April."
Looking at demand trends in the rest of Dow's Performance portfolio, Liveris pointed to "a positive trend, most notably from February to March, during which volume increased 13 percent," in Performance Plastics and Chemicals
And he emphasised that, comparing March volumes to the lows of December, "the improvement is even more pronounced."
Volumes in Polyurethanes and Systems increased 34 percent, in Epoxy, 47 percent, and in Specialty Plastics & Elastomers 18 percent, he added.
These positive trends, are, however, likely to be "offset by several challenges," Liveris noted.
* Ongoing weak demand in Polyurethanes used in construction and durables
* Frozen credit markets -- unfavourably affecting large project spending in areas such as Eastern Europe and Russia, and
* Continuing uncertainty in the automotive sector, as global manufacturers consolidate, rationalise brands and reduce manufacturing capacity.
Dow said its Performance Plastics unit posted first quarter sales of $2400 million, a 39-percent decrease from the same period last year. Prices declined 11 percent, and volume decreased 28 percent, with declines across all geographic areas. Both Dow Automotive and Dow Building Solutions reported substantial volume declines, as the slowdown in new vehicle builds and construction continued, Dow added.
First quarter earnings (EBIT) for Performance Plastics was $30 million compared with $329 million in the first quarter of 2008.
In its polyurethanes business, Dow reported both price and volume declines in Q1 on weak demand for bedding, appliances and uses in construction. In PU Systems, demand declined as customers in construction applications, particularly in Europe, delayed orders, said Dow.
Following its purchase of Rohm and Haas, Dow is now evaluating options for asset sales to reduce its debt, and Liveris said the company plans to divest Rohm and Haas's powder coatings business, and is evaluating the potential for selling other units such as its olefins, rubber and latex operations.