Dow Corning reports strong sales growth but profits dive

By Simon Pitman

- Last updated on GMT

Related tags Cosmetics

Silicones specialist Dow Corning has reported above market average sales growth for its third quarter, but profits slide on the back of lower tax benefits.

The company, which is a major supplier of silicone products to the cosmetic and personal care industry, as well as other leading industries, reported a sales rise of 7 percent to €1.51bn, compared to $1.41bn in the corresponding period last year.

Net profit slipped by 5 percent during the quarter to $176.0m, compared to $184.3m for the corresponding period last year, when the company benefited from US federal Advanced Energy Manufacturing Tax (AEMC) credits.

Comparables look strong on weak 2009

For the first nine months of the financial year, the company reported that sales were up 22 percent to $4.41bn, a figure that reflected the significant impact of falling demand from manufacturing industries during 2009 due to the financial downturn.

Net income for the first nine months of 2010 was $559.1m , compared with $366.7m for the first three quarters of 2009.

The first nine months of 2009 was positively impacted by a total payment for AEMC credit relief of $56m. This tax benefit does not appear on the 2010 balance sheet.

Opening of China Siloxane facility

“We’re seeing consistent growth in our silicones segment across all of the industries we serve, with notable strength in electronics, life sciences, solar and industrial applications,”​ said CEO J. Donald Sheets.

Sheets went on to add that the fourth quarter of 2010 will see the opening of the company’s integrated siloxane manufacturing facility in Zhangjiagang, China, which will serve the cosmetics industry, among others.

“This facility will drive further growth in Dow Corning’s silicones segment by helping us to better serve Asia, which is currently the largest and fastest growing region for our silicone products,”​ said Sheets.

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