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Mar 31, 2021
Olin Q1 2021 Earnings Report
Announced first quarter results with record adjusted EBITDA and increased sales.
Key Takeaways
Olin Corporation reported a net income of $243.6 million for Q1 2021, a significant improvement compared to the net loss of $80.0 million in Q1 2020. The company achieved a record quarterly adjusted EBITDA of $540.4 million. Sales increased to $1,918.8 million from $1,425.1 million in the same quarter last year.
Net income was $243.6 million.
Record quarterly adjusted EBITDA reached $540.4 million.
Electrochemical Unit Profit Contribution Index improved by 39% compared to the previous quarter.
Winchester business delivered record quarterly segment results.
Olin
Olin
Olin Revenue by Segment
Revenue by Segment
Chlor Alkali & Vinyls Revenue
CapyFin.comEpoxy Revenue
CapyFin.comWinchester Revenue
CapyFin.com Forward Guidance
Olin expects the Electrochemical Unit Profit Contribution Index (ECU PCI) to increase in Q2 2021. Winchester's second quarter segment results are expected to increase sequentially. Overall, Olin expects second quarter 2021 adjusted EBITDA to improve sequentially from first quarter 2021 levels excluding the net one-time financial benefits from Winter Storm Uri.
Positive Outlook
- Recent price increase announcements for chlorine, epichlorohydrin, epoxy resins, bleach, ethylene dichloride, chlorinated organics, and caustic soda forecast to positively contribute to ECU PCI.
- Price increases for ammunition and primers are expected to increase Winchester second quarter segment results sequentially.
- Expects second quarter 2021 adjusted EBITDA to improve sequentially from first quarter 2021 levels excluding the net one-time financial benefits from Winter Storm Uri.
- Olin expects its net debt to adjusted EBITDA ratio to improve to less than 2 times by year end 2021.
- Olin is targeting debt reduction of approximately $1 billion using cash generated from operations during 2021.
Challenges Ahead
- Expects some volume offsets as Olin continues to selectively sell less into poor quality markets, as they remain disciplined in their approach to caustic soda.
- Expect sequentially higher maintenance costs and unabsorbed fixed manufacturing costs of approximately $40 million associated with planned Epoxy maintenance turnarounds in second quarter 2021.
- Sensitivity to economic, business and market conditions in the United States and overseas, including economic instability or a downturn in the sectors served by us
- Unsuccessful implementation of our operating model, which prioritizes Electrochemical Unit (ECU) margins over sales volumes
- Failure to attract, retain and motivate key employees
Revenue & Expenses
Visualization of income flow from segment revenue to net income