Ashland Inc. Navigates Market Dynamics Amidst Modest Sales, Eyeing an Economic Resurgence

Ashland

WILMINGTON, DE — Ashland Inc. (NYSE: ASH) has unveiled its financial performance for fiscal Q2 2024, coupled with an outlook for Q3 and the full fiscal year.

Sales in Q2 summed up to $575 million, taking a five percent dip in comparison to the same quarter in the prior year. The results point towards a market landscape and underlying business performance in line with the company’s previously divulged expectations. While the year-over-year volumes saw their first rise since June 2022, there was a slight fall in the Life Sciences sector. The overall pricing was softer, pointing towards a slightly deflationary raw material environment.

The net income for Q2 rose to $120 million from last year’s Q2 net income of $91 million, while income from continuing operations surged to $121 million from the prior year’s $92 million. Per diluted share, the income leaped from $1.68 to $2.40. These figures show a steady uptick in the company’s income despite the variable market trends.

However, the adjusted income that omits intangibles amortization expense stood at $64 million, declining from the $78 million of the prior year’s Q2. Following the company’s share repurchase activities over the past 12 months, the average diluted shares outstanding went down from 55 million to 51 million in Q2.

In the accounts, there is a slight drop in the cash flows provided by operating activities, from $56 million last year to $54 million this year. Ashland’s remaining balance under the existing share repurchase authorization is a substantial $900 million.

Commenting on the reported financials, Guillermo Novo, Chair and CEO, Ashland, said, “While still early from a trending perspective, the breadth of our ongoing recovery, as well as constructive economic and industry data, reinforces our belief that a demand normalization is underway within the Personal Care and Specialty Additives segments.”

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He continued, “Ashland prudently managed production and inventory levels throughout the quarter as we monitored volume trends and seasonal demand pick-up, which ultimately came in as expected.”

As for the financial outlook, Ashland expects overall end market demand growth to lie anywhere from flat to low single digits this year. The results for the full year center around sales volume converging with customer end-market demand, and a subsequent ramp-up in production at its manufacturing plants. Ashland anticipates higher full-year volume and mix to balance out the revenue impact of portfolio optimization actions and diminishing pricing.

Ashland’s portfolio optimization strategy includes the closure of one of its production units in Doel, Belgium, shifting away from lower value, cyclic industrial sectors like the construction end market. The company plans to improve its HEC business, aiming to scale in higher value segments.

Novo concluded, “We are encouraged by our second quarter results, which increases our confidence in achieving the full-year outlook. We are positioned to increase production following disciplined inventory management in our first and second quarter and expect to deliver profit momentum in our second half.”

Ashland is navigating through the market demand dynamics and focusing on core business areas. With the economic and industry data pointing towards a recovery, the company remains hopeful of a demand normalization.

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