Northfield Illinois — Stepan, which makes speciality polyols for the polyurethane industry, had total sales of $489m in first quarter of 2019, down 2.0% on the 2018 quarter.
Stepan sales down 2% in Q1 2019, but rigid polyols do well
Net sales fell because the stronger dollar reduced the value of sales in Europe and Asia when they were converted. This effect was greater than the 3% sales volume increase across the company.
Operating income across the business fell by 28.1% to $29.7m in the first quarter of 2019.
Sales in the company's polymers business, which includes polyols, fell by 1.4% between Q1 2018 and Q1 2019 to $120m. This compares with $121.9 m in the 2018 period.
Operating income in the division fell by 30.1% to $12.1m in the first quarter of 2019. Currency translation effects took 4% off the value of sales in the polymer division. The 2018 quarter benefitted from $2.1m from a class-action settlement in Stepan's favour.
However, demand for rigid polyols in Europe and North America for rigid foam insulation and insulated metal panels was higher in the quarter. This led to a 3% increase in volumes of these materials compared to the first quarter of 2018.
The polymer division also contains phthalic anhydride, where lower margins and higher end-year inventories hit operating income.
Quinn Stepan, the company's CEO, said: 'We believe our polymer business will benefit from the growing market for insulation materials. We are optimistic the business will deliver both full year volume growth and incremental margin improvement versus 2018.'