Westlake Corporation Reports Record Second Quarter 2022 Results
Westlake Corporation (NYSE: WLK) reported record second quarter 2022 results, with net sales reaching $4.5 billion, up 57% year-over-year. Net income was $858 million, a 64% increase, while EBITDA stood at $1.5 billion, reflecting a 56% rise. The Performance and Essential Materials segment drove this growth with a 32% increase in overall prices and a 25% volume surge, fueled by strategic acquisitions and strong demand, especially in housing and infrastructure products. Despite higher costs, margins expanded due to effective pricing strategies.
- Record net sales of $4.5 billion, a 57% increase YoY.
- Net income rose to $858 million, a 64% year-over-year improvement.
- Record EBITDA of $1.5 billion, reflecting a 56% increase.
- Strong demand and pricing dynamics in Performance and Essential Materials segment.
- Acquisitions contributed significantly to earnings and market reach.
- Higher raw material costs and logistical constraints could impact margins in the future.
- Lower sales volumes for PVC resin due to market fluctuations.
-
Record quarterly net sales of
, an increase of$4.5 billion 57% vs. second quarter 2021 net sales
-
Record quarterly net income of
, an increase of$858 million 64% vs. second quarter 2021 net income
-
Record quarterly EBITDA of
, an increase of$1.5 billion 56% vs. second quarter 2021 EBITDA
SUMMARY FINANCIAL HIGHLIGHTS ($ in millions except per share data)
|
|
Three Months Ended |
|
Six Months Ended |
||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
Income from operations |
|
$ |
1,175 |
|
$ |
720 |
|
$ |
2,207 |
|
$ |
1,066 |
Net income attributable to |
|
$ |
858 |
|
$ |
522 |
|
$ |
1,614 |
|
$ |
764 |
Diluted earnings per common share |
|
$ |
6.60 |
|
$ |
4.04 |
|
$ |
12.43 |
|
$ |
5.91 |
EBITDA |
|
$ |
1,456 |
|
$ |
932 |
|
$ |
2,756 |
|
$ |
1,485 |
EBITDA margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Performance and Essential Materials ("PEM") Segment |
|
|
|
|
|
|
|
|
||||
Net external sales |
|
$ |
3,104 |
|
$ |
2,146 |
|
$ |
5,936 |
|
$ |
3,888 |
Income from operations |
|
$ |
965 |
|
$ |
671 |
|
$ |
1,844 |
|
$ |
959 |
EBITDA |
|
$ |
1,162 |
|
$ |
846 |
|
$ |
2,233 |
|
$ |
1,304 |
EBITDA margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Housing and Infrastructure Products ("HIP") Segment |
|
|
|
|
|
|
|
|
||||
Net external sales |
|
$ |
1,379 |
|
$ |
713 |
|
$ |
2,603 |
|
$ |
1,328 |
Income from operations |
|
$ |
236 |
|
$ |
96 |
|
$ |
421 |
|
$ |
167 |
EBITDA |
|
$ |
310 |
|
$ |
130 |
|
$ |
568 |
|
$ |
235 |
EBITDA margin |
|
|
|
|
|
|
|
|
|
|
|
|
BUSINESS HIGHLIGHTS
In the second quarter of 2022, Westlake achieved record quarterly net sales of
Overall prices increased
Overall volumes increased
EXECUTIVE COMMENTARY
"We are pleased to deliver another quarter of record results driven by Westlake's strategic market position, which has expanded over the past year with acquisitions that increased our reach into new markets and products while solidifying our ability to capture market value. Our record performance is a result of strong sales volumes across our portfolio of differentiated and specialized product offerings paired with our market position as a global leader in chlorovinyls production continuing to drive the performance of our businesses. With approximately three quarters of our sales in
"We continue to believe in the structural strength of the housing, repair and remodeling markets, and the market position for our Performance and Essential Materials remains on a solid footing. Our Housing and Infrastructure Products business is anchored by a strong presence in the repair and remodeling market, which we believe will remain strong even if new housing starts retreat from their recent highs as global interest rates rise. While the record breaking tailwinds we have experienced in our Performance and Essential Materials segment may be moderating, we believe we will continue to benefit from the high integration within our operations as North American producer's structural cost advantage has expanded with higher global energy costs when compared with our competitors in
RESULTS
Consolidated Results
For the three months ended
Second quarter 2022 net income of
Record EBITDA of
Cash and Debt
Net cash provided by operating activities was
On
Performance and Essential Materials Segment
Performance and Essential Materials income from operations for the second quarter of 2022 of
Performance and Essential Materials income from operations for the second quarter of 2022 of
Housing and Infrastructure Products Segment
For the second quarter of 2022, Housing and Infrastructure Products income from operations of
For the second quarter of 2022, Housing and Infrastructure Products income from operations of
Forward-Looking Statements
The statements in this release and the related teleconference relating to matters that are not historical facts, including statements regarding favorable future market conditions (such as the repair and remodeling market), our outlook for our business segments, our belief that we will benefit from having high integration and a structural cost-advantage in
Use of Non-GAAP Financial Measures
This release makes reference to certain "non-GAAP" financial measures, such as EBITDA, as defined in Regulation G of the
About Westlake
Westlake is a global manufacturer and supplier of materials and innovative products that enhance life every day. Headquartered in
Westlake Corporation Conference Call Information:
A conference call to discuss
A replay of the conference call will be available beginning two hours after its conclusion.
The conference call and replay will also be available via webcast at https://edge.media-server.com/mmc/p/e2ywjjui and the earnings release can be obtained via the Company's website at: http://www.westlake.com/investor-relations.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(In millions of dollars, except per share data and share amounts) |
||||||||||||||
Net sales |
|
$ |
4,483 |
|
|
$ |
2,859 |
|
|
$ |
8,539 |
|
|
$ |
5,216 |
|
Cost of sales |
|
|
3,038 |
|
|
|
1,987 |
|
|
|
5,809 |
|
|
|
3,835 |
|
Gross profit |
|
|
1,445 |
|
|
|
872 |
|
|
|
2,730 |
|
|
|
1,381 |
|
Selling, general and administrative expenses |
|
|
220 |
|
|
|
125 |
|
|
|
420 |
|
|
|
261 |
|
Amortization of intangibles |
|
|
43 |
|
|
|
27 |
|
|
|
85 |
|
|
|
54 |
|
Restructuring, transaction and integration-related costs |
|
|
7 |
|
|
|
— |
|
|
|
18 |
|
|
|
— |
|
Income from operations |
|
|
1,175 |
|
|
|
720 |
|
|
|
2,207 |
|
|
|
1,066 |
|
Interest expense |
|
|
(44 |
) |
|
|
(36 |
) |
|
|
(90 |
) |
|
|
(69 |
) |
Other income, net |
|
|
17 |
|
|
|
10 |
|
|
|
28 |
|
|
|
22 |
|
Income before income taxes |
|
|
1,148 |
|
|
|
694 |
|
|
|
2,145 |
|
|
|
1,019 |
|
Provision for income taxes |
|
|
275 |
|
|
|
158 |
|
|
|
508 |
|
|
|
230 |
|
Net income |
|
|
873 |
|
|
|
536 |
|
|
|
1,637 |
|
|
|
789 |
|
Net income attributable to noncontrolling interests |
|
|
15 |
|
|
|
14 |
|
|
|
23 |
|
|
|
25 |
|
Net income attributable to |
|
$ |
858 |
|
|
$ |
522 |
|
|
$ |
1,614 |
|
|
$ |
764 |
|
Earnings per common share attributable to |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
6.65 |
|
|
$ |
4.06 |
|
|
$ |
12.52 |
|
|
$ |
5.94 |
|
Diluted |
|
$ |
6.60 |
|
|
$ |
4.04 |
|
|
$ |
12.43 |
|
|
$ |
5.91 |
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
128,341,132 |
|
|
|
128,142,997 |
|
|
|
128,206,988 |
|
|
|
128,049,852 |
|
Diluted |
|
|
129,341,096 |
|
|
|
128,877,860 |
|
|
|
129,134,246 |
|
|
|
128,681,776 |
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
||||||||
|
|
|
|
|
||||
|
|
|
|
|
||||
|
|
(In millions of dollars) |
||||||
ASSETS |
|
|
|
|
||||
Current assets |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
1,317 |
|
$ |
1,908 |
||
Accounts receivable, net |
|
|
2,535 |
|
|
1,868 |
||
Inventories |
|
|
2,021 |
|
|
1,407 |
||
Prepaid expenses and other current assets |
|
|
140 |
|
|
80 |
||
Total current assets |
|
|
6,013 |
|
|
5,263 |
||
Property, plant and equipment, net |
|
|
8,303 |
|
|
7,606 |
||
Other assets, net |
|
|
6,056 |
|
|
5,590 |
||
Total assets |
|
$ |
20,372 |
|
$ |
18,459 |
||
|
|
|
|
|
||||
LIABILITIES AND EQUITY |
|
|
|
|
||||
Current liabilities (accounts payable and accrued and other liabilities) |
|
$ |
2,503 |
|
$ |
2,075 |
||
Current portion of long-term debt, net |
|
|
10 |
|
|
269 |
||
Long-term debt, net |
|
|
4,858 |
|
|
4,911 |
||
Other liabilities |
|
|
3,027 |
|
|
2,676 |
||
Total liabilities |
|
|
10,398 |
|
|
9,931 |
||
|
|
|
9,404 |
|
|
7,955 |
||
Noncontrolling interests |
|
|
570 |
|
|
573 |
||
Total equity |
|
|
9,974 |
|
|
8,528 |
||
Total liabilities and equity |
|
$ |
20,372 |
|
$ |
18,459 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||||
|
|
Six Months Ended |
||||||
|
|
2022 |
|
2021 |
||||
|
|
|
|
|
||||
|
|
(In millions of dollars) |
||||||
Cash flows from operating activities |
|
|
|
|
||||
Net income |
|
$ |
1,637 |
|
|
$ |
789 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
521 |
|
|
|
397 |
|
Deferred income taxes |
|
|
81 |
|
|
|
24 |
|
Net loss on disposition and others |
|
|
52 |
|
|
|
45 |
|
Other balance sheet changes |
|
|
(678 |
) |
|
|
(373 |
) |
Net cash provided by operating activities |
|
|
1,613 |
|
|
|
882 |
|
Cash flows from investing activities |
|
|
|
|
||||
Acquisition of business, net of cash acquired |
|
|
(1,163 |
) |
|
|
— |
|
Additions to investments in unconsolidated subsidiaries |
|
|
(156 |
) |
|
|
(9 |
) |
Additions to property, plant and equipment |
|
|
(493 |
) |
|
|
(270 |
) |
Other, net |
|
|
9 |
|
|
|
15 |
|
Net cash used for investing activities |
|
|
(1,803 |
) |
|
|
(264 |
) |
Cash flows from financing activities |
|
|
|
|
||||
Distributions to noncontrolling interests |
|
|
(24 |
) |
|
|
(22 |
) |
Dividends paid |
|
|
(77 |
) |
|
|
(69 |
) |
Repayment of revolver and senior notes |
|
|
(250 |
) |
|
|
— |
|
Repurchase of common stock for treasury |
|
|
(31 |
) |
|
|
— |
|
Other, net |
|
|
5 |
|
|
|
19 |
|
Net cash used for financing activities |
|
|
(377 |
) |
|
|
(72 |
) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
|
(30 |
) |
|
|
(4 |
) |
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
|
(597 |
) |
|
|
542 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
1,941 |
|
|
|
1,337 |
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
1,344 |
|
|
$ |
1,879 |
|
SEGMENT INFORMATION (Unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(In millions of dollars) |
||||||||||||||
Net external sales |
|
|
|
|
|
|
|
|
||||||||
Performance and Essential Materials |
|
|
|
|
|
|
|
|
||||||||
Performance Materials |
|
$ |
2,060 |
|
|
$ |
1,541 |
|
|
$ |
3,989 |
|
|
$ |
2,745 |
|
Essential Materials |
|
|
1,044 |
|
|
|
605 |
|
|
|
1,947 |
|
|
|
1,143 |
|
Total Performance and Essential Materials |
|
|
3,104 |
|
|
|
2,146 |
|
|
|
5,936 |
|
|
|
3,888 |
|
Housing and Infrastructure Products |
|
|
|
|
|
|
|
|
||||||||
Housing Products |
|
|
1,116 |
|
|
|
512 |
|
|
|
2,088 |
|
|
|
955 |
|
Infrastructure Products |
|
|
263 |
|
|
|
201 |
|
|
|
515 |
|
|
|
373 |
|
|
|
|
1,379 |
|
|
|
713 |
|
|
|
2,603 |
|
|
|
1,328 |
|
|
|
$ |
4,483 |
|
|
$ |
2,859 |
|
|
$ |
8,539 |
|
|
$ |
5,216 |
|
Income (loss) from operations |
|
|
|
|
|
|
|
|
||||||||
Performance and Essential Materials |
|
$ |
965 |
|
|
$ |
671 |
|
|
$ |
1,844 |
|
|
$ |
959 |
|
Housing and Infrastructure Products |
|
|
236 |
|
|
|
96 |
|
|
|
421 |
|
|
|
167 |
|
Corporate and other |
|
|
(26 |
) |
|
|
(47 |
) |
|
|
(58 |
) |
|
|
(60 |
) |
|
|
$ |
1,175 |
|
|
$ |
720 |
|
|
$ |
2,207 |
|
|
$ |
1,066 |
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
||||||||
Performance and Essential Materials |
|
$ |
192 |
|
|
$ |
168 |
|
|
$ |
376 |
|
|
$ |
329 |
|
Housing and Infrastructure Products |
|
|
70 |
|
|
|
32 |
|
|
|
141 |
|
|
|
64 |
|
Corporate and other |
|
|
2 |
|
|
|
2 |
|
|
|
4 |
|
|
|
4 |
|
|
|
$ |
264 |
|
|
$ |
202 |
|
|
$ |
521 |
|
|
$ |
397 |
|
Other income, net |
|
|
|
|
|
|
|
|
||||||||
Performance and Essential Materials |
|
$ |
5 |
|
|
$ |
7 |
|
|
$ |
13 |
|
|
$ |
16 |
|
Housing and Infrastructure Products |
|
|
4 |
|
|
|
2 |
|
|
|
6 |
|
|
|
4 |
|
Corporate and other |
|
|
8 |
|
|
|
1 |
|
|
|
9 |
|
|
|
2 |
|
|
|
$ |
17 |
|
|
$ |
10 |
|
|
$ |
28 |
|
|
$ |
22 |
|
RECONCILIATION OF EBITDA TO NET INCOME, INCOME FROM OPERATIONS AND NET CASH PROVIDED BY OPERATING ACTIVITIES (Unaudited) |
||||||||||||||||||||
|
|
Three Months
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||
|
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
(In millions of dollars) |
||||||||||||||||||
Net cash provided by operating activities |
|
$ |
700 |
|
|
$ |
913 |
|
|
$ |
617 |
|
|
$ |
1,613 |
|
|
$ |
882 |
|
Changes in operating assets and liabilities and other |
|
|
106 |
|
|
|
(1 |
) |
|
|
(67 |
) |
|
|
105 |
|
|
|
(69 |
) |
Deferred income taxes |
|
|
(42 |
) |
|
|
(39 |
) |
|
|
(14 |
) |
|
|
(81 |
) |
|
|
(24 |
) |
Net income |
|
|
764 |
|
|
|
873 |
|
|
|
536 |
|
|
|
1,637 |
|
|
|
789 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Other income, net |
|
|
11 |
|
|
|
17 |
|
|
|
10 |
|
|
|
28 |
|
|
|
22 |
|
Interest expense |
|
|
(46 |
) |
|
|
(44 |
) |
|
|
(36 |
) |
|
|
(90 |
) |
|
|
(69 |
) |
Provision for income taxes |
|
|
(233 |
) |
|
|
(275 |
) |
|
|
(158 |
) |
|
|
(508 |
) |
|
|
(230 |
) |
Income from operations |
|
|
1,032 |
|
|
|
1,175 |
|
|
|
720 |
|
|
|
2,207 |
|
|
|
1,066 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization |
|
|
257 |
|
|
|
264 |
|
|
|
202 |
|
|
|
521 |
|
|
|
397 |
|
Other income, net |
|
|
11 |
|
|
|
17 |
|
|
|
10 |
|
|
|
28 |
|
|
|
22 |
|
EBITDA |
|
$ |
1,300 |
|
|
$ |
1,456 |
|
|
$ |
932 |
|
|
$ |
2,756 |
|
|
$ |
1,485 |
|
RECONCILIATION OF SEGMENT EBITDA TO INCOME FROM OPERATIONS (Unaudited) |
||||||||||||||||||||
|
|
Three Months
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||
|
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
(In millions of dollars) |
||||||||||||||||||
Performance and Essential Materials Segment |
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from operations |
|
$ |
879 |
|
$ |
965 |
|
$ |
671 |
|
$ |
1,844 |
|
$ |
959 |
|||||
Add: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization |
|
|
184 |
|
|
192 |
|
|
168 |
|
|
376 |
|
|
329 |
|||||
Other income, net |
|
|
8 |
|
|
5 |
|
|
7 |
|
|
13 |
|
|
16 |
|||||
EBITDA |
|
$ |
1,071 |
|
$ |
1,162 |
|
$ |
846 |
|
$ |
2,233 |
|
$ |
1,304 |
|
|
Three Months
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||
|
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
(In millions of dollars) |
||||||||||||||||||
Housing and Infrastructure Products Segment |
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from operations |
|
$ |
185 |
|
$ |
236 |
|
$ |
96 |
|
$ |
421 |
|
$ |
167 |
|||||
Add: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization |
|
|
71 |
|
|
70 |
|
|
32 |
|
|
141 |
|
|
64 |
|||||
Other income, net |
|
|
2 |
|
|
4 |
|
|
2 |
|
|
6 |
|
|
4 |
|||||
EBITDA |
|
$ |
258 |
|
$ |
310 |
|
$ |
130 |
|
$ |
568 |
|
$ |
235 |
SUPPLEMENTAL INFORMATION Product Sales Price and Volume Variance by Operating Segments |
||||||||
|
|
Second Quarter 2022 vs. Second
|
|
Second Quarter 2022 vs. First
|
||||
|
|
Average
|
|
Volume |
|
Average
|
|
Volume |
Performance and Essential Materials |
|
+ |
|
+ |
|
+ |
|
+ |
Housing and Infrastructure Products |
|
+ |
|
+ |
|
+ |
|
+ |
Company |
|
+ |
|
+ |
|
+ |
|
+ |
We are no longer providing average quarterly industry prices and housing starts data.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220728005973/en/
Contact—(713) 960-9111
Investors—Steve Bender
Media—L.
Source:
FAQ
What were the key financial results for Westlake Corporation in Q2 2022?
How much did Westlake's net income increase compared to Q2 2021?
What factors contributed to Westlake's record performance in Q2 2022?
What challenges does Westlake face despite its record results?