Ashland Inc reported higher earnings in its fourth fiscal quarter and fiscal year.
Sales were $631 million, up seven percent when compared to the prior-year quarter. Each of the company’s segments achieved sales growth compared to the prior-year quarter. The year-over-year sales growth was driven primarily by disciplined pricing leading to cost recovery in a high-inflation environment and improved product mix, a release stated.
- Sales of $631 million, up 7 percent from the prior-year quarter
- Net income (including discontinued operations) of $57 million, or $1.04 per diluted share
- Income from continuing operations of $60 million, or $1.09 per diluted share
- Adjusted income from continuing operations excluding intangibles amortization expense of $80 million, or $1.46 per diluted share
- Adjusted EBITDA of $147 million
- Cash flows provided by operating activities of $179 million; ongoing free cash flow2 of $93 million
Sales growth was partially offset by an unfavorable foreign currency translation which negatively impacted sales by $33 million, or 6 percent.
Cash flows provided by operating activities totaled $179 million, up from $151 million in the prior-year quarter. Ongoing free cash flow2 totaled $93 million compared to $122 million in the prior-year quarter.
“The September quarter concludes a very strong year for Ashland,” said Guillermo Novo, CEO of Ashland. “Our commercial, operations, research and development and corporate teams worked diligently throughout the year to drive meaningful sales and earnings growth despite numerous macroeconomic and geopolitical challenges. I am proud of our global team’s accomplishments this fiscal year.”
Fiscal Year 2022 summary
Sales were $2.4 billion, up 13 percent from the prior year. Sales growth was driven by strong demand from Ashland’s global consumer-facing end markets, cost recovery through disciplined actions and enhanced product mix. The double-digit sales growth was partially offset by unfavorable foreign currency, which negatively impacted sales by $77 million, or 4 percent, during the fiscal year.
Net income was $927 million, up from $220 million in the prior year. Net income in fiscal year 2022 included income from discontinued operations related to the sale of the Performance Adhesives business earlier in the year. Income from continuing operations was $181 million, up from $173 million in the prior year.
For fiscal year 2023, Ashland expects sales to be in the range of $2.5 billion to $2.7 billion and adjusted EBITDA (interest before taxes and other expenses) to be in the range of $600 million to $650 million.
“Although we are not immune to the challenging external factors impacting the global economy, we expect the profile of our consumer-focused specialty ingredients and additives business portfolio to provide more demand resilience as we enter a more recessionary macro environment,” said Novo. “The carry-over impact of pricing, mix improvement and productivity actions should provide some tailwind to our growth and earnings and our teams are taking actions to offset incremental inflationary pressures. Our new product development pipeline remains robust, and we are investing in our business to build additional capacity for key products to support our global customer base.”
“The impact of a global recession, the war in Ukraine, foreign currency headwinds, energy cost and availability in Europe impacting customer and supplier operations, additional pandemic-related lockdowns, global supply chain and shipping challenges, and continued cost-inflation pressures are currently the greatest areas of uncertainty,” continued Novo. “Despite the external uncertainties ahead, we are focused on what we can control. The Ashland team is executing at a high level, and we are prepared for both the opportunities and challenges that lie ahead. I look forward to discussing our results and outlook in more detail on the earnings call and webcast tomorrow morning,” Novo stated.
Ashland is headquartered west of Wilmington. Its operations include former Hercules Incorporated businesses. The company moved from Kentucky to the former Hercules research site after spinning off its well-known motor oil business. Ashland also sold off the paper and water-related chemical businesses to Solenis, based near Wilmington. Solenis, funded through private equity, has been adding businesses to bolster its presence in its key markets.
Solenis earlier announced a new research and development site in the Chestnut Run area west of Wilmington. An R&D operation is now located at the Ashland site.