Westlake Corporation (NYSE: WLK) has reported its fourth quarter and full year 2023 results, revealing a record annual income from operations of $710 million in the housing and infrastructure products (HIP) segment and a 17% income from operations margin, with a 23% EBITDA margin. The company generated $2.3 billion of net cash from operating activities and $1.3 billion of free cash flow in 2023. However, the Performance and Essential Materials (PEM) segment results were impacted by identified items totaling $625 million.
In the fourth quarter of 2023, Westlake reported net sales of $2.8 billion, a net loss of $497 million, or $3.86 per share, and EBITDA of ($235) million. The company's financial results were impacted by a non-cash impairment charge of $475 million related to the company's base epoxy resin assets in the Netherlands and the goodwill associated with its epoxy business, as well as a $150 million charge to fully resolve certain liability claims. These identified items were included in the Performance and Essential Materials segment financial results. Excluding the identified items, the net income attributable to Westlake was $93 million and EBITDA was $390 million. For the full year of 2023, Westlake reported net sales of $12.5 billion, net income of $479 million, and EBITDA of $2.0 billion. Excluding the identified items, full year 2023 net income was $1.1 billion and EBITDA was $2.6 billion.
Albert Chao, President and CEO of Westlake, commented on the company's performance, saying, "While global macroeconomic conditions were challenging in 2023, Westlake was able to achieve the second highest annual sales in our history by servicing our customers' needs, commercializing new product innovations, and leveraging our position as a global low-cost manufacturer." He also provided insight into the company's outlook, stating, "Thus far in 2024, global macroeconomic conditions are largely unchanged from the fourth quarter of 2023."
Chao further added, "For the full year of 2024, we expect relatively healthy consumer spending in the U.S., supported by a strong labor market and moderating interest rates, to drive modest growth in HIP segment sales volume. In our PEM segment, we are not expecting further deterioration as we have recently seen some signs of stabilization in both sales prices and volumes in both domestic and export markets for most of our products."
Regarding the company's financials, Westlake reported a net cash provided by operating activities of $573 million for the fourth quarter of 2023 and $2,336 million for the full year of 2023. The company's cash and cash equivalents balance increased by $1,076 million to $3,304 million in 2023, while total debt increased by $27 million to $4,906 million.
The full 8-K submission can be accessed here.
