Dow 1Q 2025 net sales down by 3%

The company launches plan to further reduce spending, right-size capacity, and deliver $6 billion in cash support

Dow has reported 3 per cent decline in its net sales at $10.4 billion in Q1 2025, reflecting declines in all operating segments. Sequentially, net sales were flat, as seasonally higher demand in Performance Materials & Coatings was offset by lower prices in Industrial Intermediates & Infrastructure.

Meanwhile, volume increased 2 per cent compared to the year-ago period, with gains in all regions except Latin America. Sequentially, volume increased 2 per cent, with gains in all operating segments.

Local price was down 3 per cent year-over-year, reflecting declines in all operating segments. Sequentially, local price declined 1 per cent as gains in Packaging & Specialty Plastics were more than offset by declines in Industrial Intermediates & Infrastructure and Performance Materials & Coatings.

The company posted GAAP net loss at $290 million. Op. EBIT was $230 million, down $444 million year-over-year, primarily driven by lower prices and higher energy and feedstock costs, which were partly offset by volume gains. Sequentially, Op. EBIT was down $224 million, as volume gains across all operating segments were more than offset by higher energy and feedstock costs.

Meanwhile, Dow is delaying construction of Fort Saskatchewan Path2Zero project to match market conditions. The company is also expanding the Company's previously announced review of European assets, primarily in Polyurethanes. Additional scope includes three upstream assets across all operating segments for further action. Taken together, these new and previously announced actions total approximately $6 billion in cash support to effectively manage the extended downcycle. Dow is targeting at least $1 billion cost savings by 2026, including approximately $300 million in 2025. It is also reducing its CapEx by approximately $1 billion in 2025.

"We remain focused on disciplined execution and increased actions to improve profitability and support cash flow," said Jim Fitterling, Dow chair and CEO. "Despite ongoing macroeconomic challenges, Team Dow delivered a sixth consecutive quarter of year-over-year volume growth while taking actions to reduce costs and right-size capacity. The significant impact of slower GDP growth and volatile market conditions on our industry underscores the importance of our proactive management and best-owner mindset. Today's announcements build on Dow's cost actions that are already underway, aiming to further strengthen our financial flexibility and support a balanced capital allocation approach."

OUTLOOK

"We continue to implement decisive actions to address persistently slow GDP growth and increased macroeconomic and geopolitical uncertainty," said Fitterling. "We expect to deliver approximately $6 billion in near-term cash support. First, we are on track to close Dow's sale of a minority stake in select U.S. Gulf Coast infrastructure assets by May 1. This strategic move to create a new infrastructure-focused entity has been several years in the making, and is expected to generate proceeds of up to $3 billion in 2025. Second, we expect to receive greater than $1 billion in proceeds from the NOVA judgment this year. Additionally, our decision to delay our Path2Zero project in Alberta, Canada will result in a total reduction of $1 billion in enterprise CapEx spending this year. And lastly, we remain committed to delivering at least $1 billion in targeted cost savings by 2026. Markets worldwide are awaiting additional clarity into how the tariff and global trade negotiations will land. In the meantime, we remain focused on managing a disciplined and balanced capital allocation approach over the cycle. These collective actions help to ensure Dow's financial flexibility and our long-term competitiveness."