© Reuters. Olin (OLN) Olin (OLN) shares stumble on choppy steering; Restructuring
Shares of Olin (NYSE: ) traded down more than 4% in the pre-market on Tuesday after the company cut its outlook for the second quarter.
The chemical products manufacturer lowered its adjusted EBITDA range to $350-360 million, below previous guidance “given the impact of approximately $50 million of vinyl chloride monomer plant conversion as well as reduced market share by Olin in the face of deteriorating market conditions.” .
“The planned maintenance of the vinyl chloride monomer plant at the Freeport, Texas facility required an extension of approximately seven weeks and resulted in higher unabsorbed fixed manufacturing costs, reduced profits from lost sales, and higher expenses. The vinyl chloride monomer plant has returned to normal,” the company said in an update. .
The company also said it would cease all operations at its Gumi facility in South Korea and reduce epoxy resin and drilling capacity at its Freeport, Texas, facility. Moreover, Olin plans to reduce sales and support employees across Asia.
As a result, second quarter results are expected to include approximately $12 million in restructuring fees associated with these plans.
“Through these actions, we will have built the capacity of our global epoxy assets to improve profitability through future downturns,” commented Scott Sutton, Chairman, President and CEO.
“Both chemical businesses continue to face a challenging demand environment. Our team remains focused on demonstrating the resilience of our winning model and its ability to deliver significantly higher EBITDA adjusted earnings than Olin’s historic approach.”