Westlake Corporation Reports Fourth Quarter and Full Year 2024 Results

Record Housing and Infrastructure Products (HIP) annual income from operations of $807 million and EBITDA of $1.1 billion

Fifth consecutive quarter of year-over-year growth in company-wide sales volume

Westlake Corporation (the “Company” or “Westlake”) announced fourth quarter and full year 2024 results.

Business Highlights

In the fourth quarter of 2024, Westlake reported net sales of $2.8 billion and net income of $7 million, or $0.06 per share including $0.35 per share from a one-time non-cash tax charge. Fourth quarter EBITDA (earnings before interest expense, income taxes, depreciation and amortization) of $416 million was higher than EBITDA of $390 million (excluding “Identified Items”) in the prior-year period driven by higher sales volume in each segment.

For the full year of 2024, Westlake reported net sales of $12.1 billion, net income of $677 million (excluding “Identified Items”) and EBITDA of $2.3 billion (excluding “Identified Items”). Compared to the prior-year financial results, the Company’s 2024 results benefitted from higher sales volume, particularly in HIP, which was offset by lower product pricing and margins, particularly in PEM.

Westlake’s fourth quarter of 2024 sales increased 1% year-over-year, driven by 3% sales volume growth, representing the fifth consecutive quarter of year-over-year sales volume growth, and a 2% decline in average sales price. Housing and Infrastructure Products sales increased 4%, driven by 7% sales volume growth that more than offset a 3% decline in average sales price. Performance and Essential Materials sales decreased 1% over the same period of time, as 1% sales volume growth was slightly less than a 2% decline in average sales price.

Executive Commentary

“Westlake generated solid sales volume growth in 2024, in part due to innovative new product introductions, export opportunities enabled by our globally-advantaged feedstock & energy cost position in our Performance and Essential Materials segment in spite of globally weak macroeconomic conditions the industry is experiencing, and our position as a leading supplier to faster-growing national homebuilders in our Housing and Infrastructure Products segment. HIP segment EBITDA increased more than 10% compared to 2023 as our sales volume growth outperformed the growth in the overall market while our cost-saving actions improved profitability. While earnings in our PEM segment were lower compared to 2023 due to lower average sales price as a result of weak global industrial and manufacturing activity, we made important progress during 2024 to improve our cost structure through productivity enhancements and the decision to mothball the AC and ECH units at our epoxy site in Pernis, The Netherlands,” said Jean-Marc Gilson, President and Chief Executive Officer.

“Compared to the prior-year period our fourth quarter sales volume grew in each segment, highlighted by 7% sales volume growth in our HIP segment, which was solid compared to a challenging macroeconomic backdrop that impacted the industry. However, during the fourth quarter sales volume growth was largely offset by lower average sales price in each segment. While company-wide sales were relatively flat with the prior-year period, Westlake was able to increase EBITDA by 7% in the fourth quarter through targeted cost-reduction actions,” continued Mr. Gilson.

“Looking ahead to 2025, we are optimistic on the outlook for our HIP segment, underpinned by the need to expand the supply of residential housing in the U.S. after over 15 years of under-building to support population growth and resulting housing demand. While global macroeconomic conditions remain challenging to start the year, our PEM segment is well-positioned to capitalize on an eventual recovery in global industrial and manufacturing activity. Our focus for 2025 will be on improving the components of earnings growth that are within our control, including executing on our cost-saving plans, increasing the value that we provide to our customers, ensuring the safety and reliability of our plants, and commercializing new product innovations,” concluded Mr. Gilson.

Results

Consolidated Results

(Unless otherwise noted the financial numbers below exclude the Identified Items)

For the three months ended December 31, 2024, the Company reported net income of $7 million, or $0.06 per share, on net sales of $2.8 billion. The year-over-year decrease in net income of $86 million was primarily due to a one-time non-cash charge of approximately $45 million in the fourth quarter of 2024 for the revaluation of state deferred tax assets and deferred tax liabilities caused by recent legislative changes in Louisiana.

Fourth quarter 2024 net income of $7 million decreased by $176 million sequentially as compared to the third quarter of 2024. The decrease in net income compared to the prior quarter was primarily due to lower sales prices in Performance Materials and seasonally lower Housing and Infrastructure Products sales volume.

EBITDA of $416 million for the fourth quarter of 2024 increased by $26 million compared to fourth quarter 2023 EBITDA of $390 million. Fourth quarter 2024 EBITDA decreased by $164 million compared to third quarter 2024 EBITDA of $580 million.

For the full year of 2024, net income of $677 million decreased by $392 million as compared to 2023 net income of $1.1 billion. Income from operations of $1.0 billion for the full year of 2024 decreased by $0.4 billion as compared to income from operations of $1.4 billion for the full year of 2023. The decreases in net income and income from operations were primarily due to lower average selling price, particularly in Performance and Essential Materials.

A reconciliation of EBITDA and net income to EBITDA excluding Identified Items and net income excluding Identified Items as well as a reconciliation of EBITDA to net income, income from operations (including and excluding Identified Items) and net cash provided by operating activities as well as a reconciliation of free cash flow to net cash flow provided by operating activities can be found in the financial schedules at the end of this press release.

Cash and Debt

Net cash provided by operating activities was $434 million for the fourth quarter of 2024 and $1.3 billion for the full year of 2024. Capital expenditures for the fourth quarter and full year of 2024 were $285 million and $1.0 billion, respectively. For the fourth quarter and full year of 2024, free cash flow (net cash provided by operating activities less capital expenditures) was $149 million and $306 million, respectively. As of December 31, 2024, the Company’s cash and cash equivalents balance was $2.9 billion and total debt was $4.6 billion.

Housing and Infrastructure Products Segment

For the fourth quarter of 2024, Housing and Infrastructure Products income from operations of $129 million increased by $8 million as compared to the fourth quarter of 2023. The year-over-year increase was the result of higher sales volume, particularly for pipe and fittings.

Sequentially, Housing and Infrastructure Products income from operations decreased by $73 million as compared to the third quarter of 2024. This decrease in income from operations versus the prior quarter was primarily driven by lower sales volume as a result of the typical seasonality of customer demand.

For the full year of 2024, Housing and Infrastructure Products net sales of $4.3 billion increased by $0.1 billion as compared to 2023. Housing Products net sales of $3.6 billion increased by $0.1 billion due to solid sales volume growth, particularly in siding & trim and roofing. Infrastructure Products net sales of $0.7 billion was in line with 2023 as higher sales volume offset lower average sales price. Housing and Infrastructure Products income from operations of $807 million increased by $97 million as compared to the full year of 2023 primarily due to growth in Housing Products net sales and cost-saving initiatives.

Performance and Essential Materials Segment

(Unless otherwise noted the financial numbers below exclude the Identified Items)

For the fourth quarter of 2024, Performance and Essential Materials loss from operations was $41 million as compared to the fourth quarter of 2023’s loss from operations of $39 million due to lower selling prices for most of our major products, particularly for chlorine, PVC resin and polyethylene. This negative impact was partially offset by higher sales volume, particularly for polyethylene and PVC resin.

Sequentially, Performance and Essential Materials income from operations for the fourth quarter of 2024 decreased by $107 million as compared to the third quarter of 2024 (excluding “Identified Items”). This decrease in income from operations versus the prior quarter was primarily driven by lower average sales price.

For the full year of 2024, Performance and Essential Materials net sales of $7.8 billion decreased by $0.5 billion as compared to 2023. Performance Materials net sales of $4.6 billion in 2024 were relatively in line with 2023 net sales of $4.7 billion as higher sales volume, particularly for PVC resin and epoxy resin, offset lower average sales price, particularly for PVC resin and epoxy resin. Essential Materials net sales of $3.2 billion decreased by $0.5 billion from 2023 primarily due to lower caustic soda average sales price. Performance and Essential Materials income from operations of $204 million decreased by $480 million as compared to 2023. This decrease in income from operations versus the prior-year was primarily driven by lower average sales price and margins.

For full results click here.

About Westlake

Westlake is a global manufacturer and supplier of materials and innovative products that enhance life every day. Headquartered in Houston, we provide the building blocks for vital solutions — from building products and infrastructure materials, to packaging and healthcare products, to automotive and consumer goods. For more information, visit the company’s website at www.westlake.com.

Contact:

Ben Ederington – Media Contact – mediarelations@westlake.com – (713) 960-9111

Source: Westlake Chemical Corporation