Olin Corporation (NYSE: OLN) announced its financial performance for the third quarter ending September 30, 2024. The company reported a net loss of $24.9 million, or $0.21 per diluted share, a stark contrast to the net income of $104.1 million, or $0.82 per share, in Q3 2023. Adjusted EBITDA for Q3 2024 stood at $160.3 million, excluding $130.2 million in depreciation and amortization and $7.9 million in restructuring charges, down from $314.8 million in the same period last year. Sales for Q3 2024 totaled $1,589.5 million, compared to $1,671.4 million in Q3 2023.
Hurricane Impact and Operational Challenges
CEO Ken Lane highlighted the challenges faced during the quarter, particularly the impact of Hurricane Beryl. The hurricane-related disruptions required an unplanned outage, which added $9.4 million to the estimated $100 million in losses for Q3 2024. The total impact of the hurricane on 2024 is projected to be around $135 million, with residual effects expected in Q4. Lane noted that despite these setbacks, the company’s Chemicals segment performed slightly better than anticipated, excluding the hurricane’s impact. The Freeport, Texas facilities are now resuming normal operations.
Segment Performance Overview
- Chlor Alkali Products and Vinyls: Q3 2024 sales reached $871.6 million, down from $969.6 million in Q3 2023. The segment’s earnings dropped to $45.3 million, compared to $172.3 million last year, mainly due to lower caustic soda pricing and $76.7 million in costs associated with the hurricane.
- Epoxy: Sales declined to $285.1 million from $321.6 million in Q3 2023, primarily due to lower volumes and lost sales caused by the hurricane. The segment reported a loss of $42.8 million, compared to a $28.8 million loss last year.
- Winchester: Sales increased to $432.8 million, up from $380.2 million in Q3 2023, due to higher military sales and revenue from the acquisition of White Flyer. However, the segment’s earnings dropped to $53.4 million from $64.5 million in Q3 2023, impacted by lower commercial ammunition sales.
Outlook for Q4 2024
Lane indicated that although global demand for caustic soda is gradually improving, seasonal declines are expected in Q4. The company projects adjusted EBITDA for Q4 2024 to be between $170 million and $200 million, excluding the hurricane’s impact. The Chemicals segment is anticipated to see a seasonal decrease in earnings, while Winchester faces lower demand for commercial ammunition as retailers continue to reduce inventory levels.
Financial Position and Share Repurchases
As of September 30, 2024, Olin’s cash balance was $225.9 million, with net debt amounting to approximately $2.7 billion. The net debt-to-adjusted EBITDA ratio was 3.0 times, and the company had around $1 billion in available liquidity. During Q3 2024, Olin repurchased approximately 1 million shares for $45.4 million, leaving $0.7 billion remaining under its share repurchase authorization.
Conference Call Information
Olin’s senior management will host a conference call on October 25, 2024, at 9:00 a.m. Eastern time to discuss the Q3 2024 financial results. The call will be followed by a Q&A session, with accompanying slides available on the company’s website. A replay of the webcast will be accessible later in the day.
Company Overview
Olin Corporation is a leading global manufacturer and distributor of chemical products, as well as a top U.S. producer of ammunition through its Winchester segment. Its product lineup includes chlorine, caustic soda, vinyls, epoxies, and various industrial chemicals.
Cautionary Statement on Forward-Looking Information
The report includes forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially. These risks include economic conditions, pricing pressures, and regulatory changes, among others. For a comprehensive discussion, refer to the company’s filings with the SEC.
