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Dow Q1 results show strong growth


The Dow Chemical Company announced that sales in Q1 of 2011 hit US$14.7 billion, a 20 per cent increase compared with the same period last year.

Top-line growth was driven by an eight per cent increase in volume and a 12 per cent increase in price. All operating segments and geographic areas reported double-digit sales increases.

At a company level, EBITDA rose US$622 million, or 34 per cent, to US$2.4 billion. This represents the second highest quarterly EBITDA on record for the company.

Performance Products and Chemicals and Energy each posted EBITDA increases in excess of 50 per cent, and Coatings and Infrastructure EBITDA increased more than 30 percent.

Health and Agricultural Sciences EBITDA reached a new quarterly record of $406 million and Plastics EBITDA exceeded US$800 million. Equity earnings were US$298 million, led by strong performance from Dow Corning, MEGlobal and the company's joint ventures in Kuwait.

Markus Wildi, President, Dow Middle East commented, "The first quarter of 2011 continued the strong growth based on positive economic trends we saw last year. We continue to strengthen our existing partnerships in the region while advancing a manufacturing strategy founded on our asset-light approach as we bring Dow's technological expertise to the region and expand our presence. In Q1, we extended our geographic footprint with a new office in Kuwait; we also finalized a comprehensive cooperation agreement that establishes Dow's Middle East and Africa R&D Center at KAUST."

Coatings and Infrastructure sales were US$1.4 billion, up 16 per cent compared with the same period last year. Volume rose 3 per cent versus the year-ago period, and price was up 13 per cent.

Volume gains were reported in Dow Adhesives and Functional Polymers and Dow Building and Construction, while volume fell slightly in Dow Coating Materials due to soft demand from architectural end-markets in developed regions and constrained supply for industrial coatings raw materials.

Sales in Plastics were US$3 billion, up 19 percent from the same quarter last year. Volume increased 5 per cent, while price rose 14 percent. Polyethylene reported a double-digit sales gain, driven by price increases in all geographic areas resulting from healthy demand and increasing raw material costs. As a result of disciplined price and volume management, the business maintained strong margins despite high and volatile feedstock and energy costs.

Polypropylene reported a significant sales gain, driven by double-digit price increases in all geographic areas, as well as robust demand in EMEA (Europe, Middle East and Africa) due to low inventory levels in the value chain and growing demand for automotive, consumer durable goods and packaging end-markets.

Sales in Performance Products were US$2.9 billion, up 18 per cent compared with the year-ago period. Volume rose 2 percent and price increased 16 percent. Volume growth in North America and EMEA was partially offset by reduced volume in Asia Pacific, where businesses implemented price gains to recapture margin.

"This quarter's performance showed once again that we remain firmly on our earnings growth trajectory," said Andrew N. Liveris, Dow's chairman and chief executive officer. "Our focus on execution was clear as we drove significant sales increases across all geographies and all operating segments through rigorous price and volume discipline. As a result, we achieved yet another quarter of margin expansion and delivered EBITDA growth of more than 30 per cent."

"We also advanced our innovation pipeline, bringing to market technologies that answer the needs of a changing global economy. Our whole focus at Dow is on execution to deliver profitable, sustainable growth, and this quarter's performance shows we remain right on strategy," he added.