The following is a summary of the Dow Inc. (DOW) Q1 2024 Earnings Call Transcript:
Financial Performance:
Dow's net sales in Q1 were $10.8 billion, a decrease of 9% year-over-year, and an increase of 1% sequentially.
The company had an operating EBIT for the quarter of $674 million, representing a $34 million decrease year-over-year, but an improvement of $115 million sequentially.
Cash flow from the quarter's operations stood at $460 million, resulting in a 94% cash-flow conversion on a trailing 12-month basis.
For the second quarter, the company anticipates earnings to improve by about $200 million compared to the first quarter.
Business Progress:
The company is making near-term investment efforts towards higher-value and lower-risk growth ventures, expected to result in approximately $2 billion in additional underlying EBITDA by mid-decade.
Construction has begun on the Path2Zero project in Fort Saskatchewan, Alberta, expected to yield an extra $1 billion per year in mid-cycle EBITDA growth.
The company plans to advance its waste transformation strategy and projects possible revenue of over $500 million from EBITDA by 2030.
Dow Inc.'s volume grew by about 76% globally in the first quarter of 2024 due to increased demand and lower energy costs in numerous regions.
The company has a favourable outlook on global market trends for their products and plans to accelerate investment in Alberta's hydrogen-fueled cracker project and Mura pyrolysis feedstock.
Dow projects an annual EBITDA run rate of approximately $6.3 billion-$6.5 billion, with a mid-cycle increase to around $9 billion, chiefly through volume recovery.
Demand and pricing for Dow's silicone products have improved across all downstream markets, including building and infrastructure, personal care, industrial and chemical processing, mobility, and consumer electronics.
More details: Dow Inc IR
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