• Home
• Oil & Gas
• News Article

Dow Reports First Quarter Results

Dow Delivers 90 Percent Increase in Earnings per Share Driven by 20 Percent Sales Gain and Broad-Based Demand Growth(1)
Dubai, United Arab Emirates (UAE) - May 17 2011: The Dow Chemical Company (NYSE: DOW) achieved sales of $14.7 billion in the first quarter of 2011, a 20 percent increase compared with the same period last year. Top-line growth was driven by an 8 percent increase in volume and a 12 percent increase in price. All operating segments and geographic areas reported double-digit sales increases.

Reported earnings for the quarter were $0.54 per share, compared with $0.41 per share in the same period last year. The Company earned $0.82 per share in the quarter, excluding certain items. This compares with earnings of $0.43 per share in the same quarter last year, excluding certain items. Certain items in the current quarter consisted of a loss on the early extinguishment of debt of $0.26 per share, and Rohm and Haas acquisition-related integration costs of $0.02 per share, both reflected in Corporate.

At a Company level, EBITDA rose $622 million, or 34 percent, to $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 percent, 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 $800 million.

Equity earnings were $298 million, led by strong performance from Dow Corning, MEGlobal and the Company's joint ventures in Kuwait.

Coatings and Infrastructure sales were $1.4 billion, up 16 percent compared with the same period last year. Volume rose 3 percent versus the year-ago period, and price was up 13 percent. 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 $3 billion, up 19 percent from the same quarter last year. Volume increased 5 percent, 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

(1) Within the text of this release:

-All sales, price and volume comparisons are presented excluding divestitures, unless otherwise noted.

-All references to earnings per share, EBITDA⁽²⁾ and EBITDA margin⁽²⁾ are presented excluding certain items,⁽³⁾ unless otherwise specified.

(2) EBITDA is defined as earnings before interest, income taxes, depreciation and amortization. EBITDA margin is EBITDA as a percentage of reported sales. A reconciliation of EBITDA to "Income Before Income Taxes" is provided following the Operating Segments table.

(3) See Supplemental Information at the end of the release for a description of these items.

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 $2.9 billion, up 18 percent 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 percent.

"With our transformed business portfolio and broad geographic presence, we have now achieved eight consecutive quarters of margin growth. This marked the second best quarterly EBITDA in our Company's history. We also further enhanced our financial flexibility by paying down $2.5 billion in debt, which will reduce our interest expense and be immediately accretive. And our recently announced dividend increase is yet another proof point of how we are delivering increasing value for shareholders.

"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.

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."

Middle East highlights for 2011 include:

Business Growth

• Dow announced the opening of its new office in Kuwait. Headed by Jamel Attal, Dow's newly appointed Managing Director in Kuwait, the new office emphasizes the critical significance of its investments and partnerships in the country.

Innovation

• Dow and King Abdullah University of Science and Technology (KAUST) finalized a comprehensive cooperation agreement that establishes Dow's Middle East and Africa R&D Center at KAUST on the University's campus. The agreement represents another milestone for Dow as a Founding Member of the KAUST Industrial Collaboration Program (KICP).

• Dow participated in and sponsored the 'en.v Initiative', REUSE Speakers Forum. As a series of panel discussions that were the first of its kind in Kuwait, the purpose of the forum was to promote a dialogue on sustainability in the region and spark a discussion on ways that can further put into perspective the challenges that the Arab world is facing regarding environmental issues.

Social Investment

• Dow Chemical in Kuwait signed a sponsorship agreement with Al Bayan Bi-lingual School (BBS), a leading Kuwaiti educational institution, to launch various educational programs about sustainability, the importance of environmental conservation and recycling practices.

• Dow Chemical in Kuwait supported REUSE 4.0, Kuwait's foremost sustainability and recycling event, as Title Sponsor. The sponsorship is part of a wide-ranging partnership with 'The en.v Initiative', a leading organization dedicated to social responsibility in the Arab World, to promote sustainability in the country.

• Dow was a premier benefactor of the Kuwait-America Foundation (KAF) "Enduring Support" gala dinner. The 2011 gala raised money for the United Services Organization (USO), specifically to support programs to provide rehabilitation programs for American military veterans and their families

The complete first quarter 2011 earnings statement is available at: http://www.dow.com/financial/earnings/2011/11q1earn.htm

-Ends-

About Dow
Dow (NYSE: Dow) combines the power of science and technology with the "Human Element" to passionately innovate what is essential to human progress. The Company connects chemistry and innovation with the principles of sustainability to help address many of the world's most challenging problems such as the need for clean water, renewable energy generation and conservation, and increasing agricultural productivity. Dow's diversified industry-leading portfolio of specialty chemical, advanced materials, agrosciences and plastics businesses delivers a broad range of technology-based products and solutions to customers in approximately 160 countries and in high growth sectors such as electronics, water, energy, coatings and agriculture. In 2010, Dow had annual sales of $53.7 billion and employed approximately 50,000 people worldwide. The Company's more than 5,000 products are manufactured at 188 sites in 35 countries across the globe. References to "Dow" or the "Company" mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted. More information about Dow can be found at www.dow.com.

About Dow in the Middle East
Dow has a longstanding relationship with the Middle East beginning with the establishment of manufacturing and commercial facilities in the United Arab Emirates more than 30 years ago. Since then, Dow has established a solid presence in the Middle East petrochemicals industry, partnering with leading regional companies to set up state-of-the-art petrochemical complexes across the region. For 15 years, Dow and Petrochemical Industries Company K.S.C. (PIC) of Kuwait have shared one successful milestone after another, partnering on six industry-leading joint ventures. Saudi Aramco and Dow are in the formation process of a joint venture to build, own and operate a world-scale integrated chemicals complex in the Eastern Province of the Kingdom of Saudi Arabia. From the entrepreneurship initiatives of Young Arab Leaders to the new Dow Middle East and Africa R&D Center at the King Abdullah University of Science and Technology in Saudi Arabia, Dow actively supports the social and economic aspirations of the communities where it operates. For more information about Dow in the Middle East, please visit: www.dowmiddleeast.com

Note: The forward‑looking statements contained in this document involve risks and uncertainties that may affect the Company's operations, markets, products, services, prices and other factors as discussed in filings with the Securities and Exchange Commission. These risks and uncertainties include, but are not limited to, economic, competitive, legal, governmental and technological factors. Accordingly, there is no assurance that the Company's expectations will be realized. The Company assumes no obligation to provide revisions to any forward‑looking statements should circumstances change, except as otherwise required by securities and other applicable laws.

For further information on Dow:
Fadi Fahem
Dow Middle East
Tel: +971 4 312 3687
ffahem@dow.com

Nisreen Sarryeh
Weber Shandwick
T +971 4 321 0077
dow@ws-mena.com

© Press Release 2011