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Sep 30, 2023
Westlake Q3 2023 Earnings Report
Westlake reported third quarter results with record Housing and Infrastructure Products segment income and EBITDA, despite challenging economic conditions.
Key Takeaways
Westlake Corporation announced third quarter 2023 results, achieving net sales of $3.1 billion and net income of $285 million. The company's Housing and Infrastructure Products (HIP) segment reached record income from operations and EBITDA, supported by resilient North American construction activities. However, the Performance and Essential Materials (PEM) segment faced challenges due to soft economic conditions and lower average sales prices.
Achieved record Housing and Infrastructure Products segment income from operations of $256 million.
Housing and Infrastructure Products segment EBITDA reached a record $327 million.
Generated net cash from operating activities of $696 million and free cash flow of $451 million.
Overall sales volumes increased 4% sequentially from the previous quarter.
Westlake
Westlake
Forward Guidance
Westlake anticipates weak macroeconomic conditions and high interest rates to persist, leading to softer demand and lower sales prices in the PEM segment. Despite the near-term challenges, the company believes its products are well-positioned, with PEM supported by North American feedstock advantages and HIP demonstrating portfolio strength. They expect some sales volume impact from elevated borrowing rates and continue to seek opportunities to enhance shareholder value through free cash flow deployment.
Positive Outlook
- PEM volumes and profitability are supported by North American structural feedstock and energy cost advantage.
- PEM is supported by a high degree of vertical integration.
- PEM is supported by product diversity.
- HIP segment results reflect the strength of our portfolio.
- The company continues to seek opportunities to redeploy robust free cash flow and solid balance sheet in ways that enhance shareholder value.
Challenges Ahead
- Weak macroeconomic conditions remain in place.
- Elevated inflation remains in place.
- High interest rates remain in place driving softer demand for all of our products.
- Low sales prices in our PEM segment.
- Expect some impact to sales volume from the elevated level in borrowing rates.