20 Companies! Chemical Giants’ 2024 Performance Summary!

On January 30, Dow Inc. released its latest financial results: full-year 2024 net sales totaled $43.0 billion, down $1.6 billion year-on-year from $44.6 billion in 2023; GAAP net income amounted to $1.2 billion—up from $660 million in 2023; operating EBIT stood at $2.6 billion, down from $2.8 billion a year earlier. Operating cash flow from continuing operations was $2.9 billion, significantly lower than $5.2 billion in 2023. The company announced cost-cutting measures targeting $1 billion in annual savings—including eliminating approximately 1,500 positions globally. Covestro On February 26, Covestro published its 2024 fiscal-year results: sales declined 1.4% to €14.2 billion (€14.4 billion in the prior year), primarily due to lower selling prices; EBITDA remained stable, dipping only 0.8% to €1.1 billion—broadly in line with expectations; net profit was -€266 million (vs. -€198 million in the prior year); free operating cash flow totaled €89 million (vs. €232 million in the prior year). In Q4 2024 alone, Covestro’s sales rose 0.9% year-on-year to approximately €3.4 billion; EBITDA surged 44.7% year-on-year to €191 million; and free operating cash flow jumped 246.6% year-on-year to €253 million. Arkema On February 28, Arkema reported its full-year 2024 results: sales reached €9.5 billion—stable year-on-year. Volumes increased by 2.4%, driven by growth in Asia’s specialty materials business. EBITDA totaled €1.532 billion, with an EBITDA margin of 16.1%, slightly up year-on-year. Recently, Arkema has invested in several major growth initiatives—including acquiring PIAM’s polyimide business, acquiring Ashland’s and Dow’s adhesives businesses, and expanding capacity in its Advanced Materials division—to serve attractive markets such as bio-based consumer goods, new energy, electrification, 3D printing, and sports. DuPont On February 11, DuPont released its 2024 financial results: full-year net sales reached $12.4 billion (approx. RMB 90.63 billion), up 3% year-on-year; organic sales grew 1%, with favorable portfolio effects contributing 3%—partially offset by a 1% negative currency impact. Operating EBITDA totaled $3.14 billion, up 7% year-on-year—driven mainly by volume growth, productivity gains, and savings from restructuring actions, partially offset by higher variable compensation expenses. Notably, on January 15, DuPont announced it would no longer pursue the spin-off of its Water Solutions business, instead advancing the planned spin-off of its Electronics business. Celanese On February 18, global chemical and specialty materials company Celanese reported full-year 2024 net sales of $10.3 billion—down 6% year-on-year—primarily reflecting persistently weak global demand across key end markets including automotive, paints & coatings, construction, and industrial sectors. In 2024, the company reported a consolidated operating loss of $697 million; adjusted EBIT totaled $1.6 billion—down 6% year-on-year; operating EBITDA amounted to $2.4 billion, with corresponding margins of -7%, 16%, and 23%.

Interpretation of Financial Metrics (Updated)

Metric Name Calculation Formula Meaning & Interpretation How to Assess / Reference Standards I. Per-Share Metrics Basic Earnings Per Share (EPS) Net income attributable to parent company ÷ total shares outstanding The most critical profitability metric—measures how much profit is generated per share Higher values are better; YoY growth matters more; e.g., Jiahua: 0.74; Luotuo: 0.71 Diluted EPS EPS assuming full conversion of all convertible bonds/options A more conservative measure that accounts for potential dilution from future share issuance A large gap between diluted and basic EPS suggests significant potential for share dilution Book Value Per Share (BVPS) Total equity ÷ total shares outstanding The book value (“net asset value”) attributable to each share P/B ratio = stock price ÷ BVPS; P/B < 1 indicates “trading below book value” Operating Cash Flow Per Share Net operating cash flow ÷ total shares outstanding Actual cash generated per share—harder to manipulate than EPS Compare with EPS; consistently lower operating cash flow per share signals low earnings quality Retained Earnings Per Share Cumulative retained earnings ÷ total shares outstanding How much the company has “saved up” for future dividends or reinvestment Higher values indicate greater dividend potential; persistently high retained earnings without dividends may signal lack of attractive investment opportunities Reserve Per Share Capital reserve ÷ total shares outstanding Primarily derived from share premium upon issuance—can be used for share capitalization (e.g., bonus issues) High reserves suggest potential for “high-dividend-and-bonus” distributions; cannot be used for cash dividends II. Profitability Metrics Total Operating Revenue Sum of all operating revenues Indicates the scale of operations and industry standing Assess growth via YoY/QoQ comparisons; absolute value alone has limited meaning Total Profit Operating profit + non-operating income/expenses (pre-tax) Profit before tax after deducting all costs and expenses Compare with net profit to assess tax burden impact Net Income Attributable to Parent Company Net income attributable to shareholders of the parent company The most critical profit figure—the source of distributable profits to shareholders Compare with non-recurring net income to evaluate earnings quality Non-Recurring Net Income Net income attributable to parent company – non-recurring gains/losses Net income excluding one-time items (e.g., asset disposals, government subsidies, investment gains) More reflective of core operations; if net income is high but non-recurring net income is low, earnings may be artificially inflated by one-time items—a key red-flag indicator III. Profitability Ratios Average Return on Equity (ROE) Net income ÷ average equity (average of beginning and ending equity) Warren Buffett’s favorite metric—measures how much profit shareholders earn per RMB 100 invested >15%: excellent; 10–15%: good; 5–10%: fair; <5%: poor (red-flag threshold); using average equity yields more accurate results Diluted ROE Net income ÷ ending equity ROE calculated using ending equity—more conservative than average ROE When differences between the two are minor, either suffices; larger discrepancies indicate substantial intra-year equity changes Gross Profit Margin (Revenue – Cost of Goods Sold) ÷ Revenue The percentage remaining after direct production costs—reflects product competitiveness and pricing power Higher is better; e.g., Kweichow Moutai >90%; steel sector: 5–10%; cross-sector comparisons are meaningless—use only within same industry

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