The following is a summary of the Stepan Company (SCL) Q1 2024 Earnings Call Transcript:
Financial Performance:
Stepan Company's adjusted EBITDA for Q1 2024 was up 5% YoY to $51.2 million.
Global sales decreased 15% YoY due to lower selling prices and unfavorable product mix, partially offset by a 1% increase in global sales volume.
Net sales in Q1 2024 decreased 15% YoY, primarily impacted by lower costs for raw materials and unfavorable product mix.
The company generated positive free cash flow of $11.4 million in Q1 2024.
Stepan successfully repaid $8.5 million in dividends with $125 million remaining under the share repurchase program.
Adjusted net income decreased to $14.7 million in Q1 2024 compared to the prior year's $16.4 million.
Business Progress:
Weakness in the agricultural and operational issues at their Millsdale site were counterbalanced by strong recovery in volumes across other core markets.
Significant growth observed in Personal Care, Oilfield end markets, and in Latin American surfactant volumes.
The construction of a new alkoxylation production facility in Pasadena, Texas, is around 90% complete and due to startup in Q4 2024.
Added around 400 new Tier 2 and Tier 3 customers in Q1 2024, further diversifying its customer base.
Stepan's initiatives are on track to deliver $50 million in cost savings in 2024.
Continuous investment in business growth and returning cash to shareholders is planned.
Expectation of EBITDA improvement in the second half of the year due to predicted rebound in agriculture business.
Increased demand at the farmer level is anticipated starting in Q3 or Q4 of the year due to expected inventory destocking phase in agriculture business.
More details: Stepan IR
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