Eastman Chemical reports Q2 FY20 sales $1,924 mn

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Eastman Chemical Company, a specialty additives company, has reported sales decrease to $1,924 million in its second quarter (Q2) FY20 ended on June 30, 2020 compared to sales of $2,363 million in same period last year. Company stated that the sales decreased primarily due to lower sales volume and to a lesser extent, lower selling prices.

“Our sales revenue in the first half of the year was relatively solid, demonstrating the value of a diverse set of end markets and the benefit of our innovation-driven growth model. And, we moved swiftly to aggressively manage costs to offset meaningfully lower capacity utilisation,” Mark Costa, board chair and CEO at Eastman Chemical Company, said in a press release. 

Company’s sales volume decline during Q2 FY20 was most pronounced for products used in end markets negatively impacted by Covid-19, including transportation, building and construction, consumer durables, and textiles. This decrease was partially offset by higher sales volume for products used in resilient end markets including consumables, personal care and wellness, medical, and agriculture.

Earnings before interest and taxes (EBIT) for the quarter fell to $54 million (Q2 FY19: $371 million). Gross profit were down to $371 million ($589 million). Selling, general and administrative expenses slightly fell to $155 million ($165 million). Net earnings attributable to Eastman were $27 million ($258 million).

Sales of additives & functional products segment for Q2 FY20 were $685 million ($823 million). Advanced materials segment sales dropped to $567 million ($696 million). Chemical intermediates sales decreased to $461 million ($631 million). However, fibres segment remained unchanged at $211 million ($213 million).

Sales in all the customer location were down during the quarter: US were $786 million ($995 million); Asia Pacific $523 million ($574 million); Europe, Middle East, and Africa $526 million ($649 million); and Latin America $89 million ($145 million).

“We have done an outstanding job of navigating a challenging global business environment during the first half of the year, delivering nearly the best free cash flow result for the first half of a year in our history. Looking to the second half of the year, visibility remains limited. However, we are seeing demand for products serving the auto, tires, building and construction, and consumer durables end markets begin to recover sequentially from the low levels of the second quarter leading to increased capacity utilisation, particularly in advanced materials,” Costa said.