Olin to Cut Epoxy Resin, Upstream Capacity and Close South Korea Facility

By Robb M. Stewart

Olin scaled back earnings expectations for the current quarter after maintenance at its Texas facility took longer than expected and it made the decision to scale back epoxy resin and upstream capacity and shutter all operations at a South Korean facility.

The chemical products and ammunition maker said Tuesday it anticipated earnings before interest, tax, depreciation and amortization of between $350 million and $360 million for the second quarter of the year, lower than it previously expected due to an about $50 million hit from the extended turnaround time to conduct maintenance at its vinyl chloride monomer plant in Freeport, Texas. It said the plant has returned to operations at a reduced rate.
In late April, Olin forecast second-quarter Ebitda would be slightly lower than the $434.1 million recorded in the first three months of the year amid a challenging global economic environment.
Olin said it now plans to cease all operations at its Gumi, South Korea, facility, reduce sales and support staffing across Asia, and cut epoxy resin and upstream capacity at its Freeport facility.
Results for the second quarter are forecast to include about $12 million of restructuring charges associated with these plans, it said.
Olin’s shares were 4.5% lower in premarket trading, after closing Monday at $52.36, down 1.1% this year.
Write to Robb M. Stewart at [email protected]