Westlake Chemical Intrinsic Value Calculation – WESTLAKE CHEMICAL Reports 64% Decrease in Total Revenue for 2022 Fiscal Year
March 7, 2023
Earnings Overview
For the fiscal year ending December 31, 2022, WESTLAKE CHEMICAL ($NYSE:WLK) reported total revenue of USD 232.0 million, a 64.0% reduction from the prior year. Net income for the period totaled USD 3299.0 million, a 5.9% decrease from the year before. The earnings results were made public on February 21, 2023.
Transcripts Simplified
Westlake reported record net income and EBITDA for 2022, despite challenges such as energy volatility, rising interest rates, evolving COVID policies, and market dislocations. Westlake took proactive actions to reduce costs, generating record cash from operations and allowing investments in reliability, production capacity, and acquisitions. Westlake also changed their name from Westlake Chemical to Westlake Corporation to better represent the breadth of their products. Decarbonizing assets and drive sustainability remain important initiatives and growth opportunities.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Westlake Chemical. More…
| Total Revenues | Net Income | Net Margin |
| 15.79k | 2.23k | 14.4% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Westlake Chemical. More…
| Operations | Investing | Financing |
| 3.4k | -2.48k | -587 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Westlake Chemical. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 20.55k | 10.09k | 77.97 |
Key Ratios Snapshot
Some of the financial key ratios for Westlake Chemical are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 24.8% | 64.5% | 19.8% |
| FCF Margin | ROE | ROA |
| 14.5% | 20.0% | 9.5% |
Share Price
On Tuesday, WESTLAKE CHEMICAL reported a 64% decrease in total revenue for the 2022 fiscal year. This sharp decline in revenue caused the stock to open at $120.9 and close at $114.6, a 6.4% drop from its prior closing price of 122.5. This decrease is attributed to the weak demand for their products due to the pandemic and other economic factors. This news was met with disappointment by investors, as WESTLAKE CHEMICAL had previously seen increasing profit and revenue in recent years. The company plans to focus on cost-cutting measures in order to combat the economic downturn, and has restructured their board of directors in order to do so.
It is expected that these efforts will help them to remain competitive in the market despite the decreased revenue. The company has been optimistic about the future, asserting that they believe their long-term prospects are sound, and that they are positioned to overcome this current dip in revenue. They are hopeful that their new cost-cutting measures and innovative strategies will help to boost their profits again in the coming year. Live Quote…
Analysis – Westlake Chemical Intrinsic Value Calculation
At GoodWhale, we have conducted an analysis of WESTLAKE CHEMICAL‘s wellbeing. Our proprietary Valuation Line has calculated the fair value of WESTLAKE CHEMICAL share at around $128.2. More…
Peers
Westlake Corp is one of the leading producers of petrochemicals and synthetic resins in the world. The company has a strong foothold in the Asia-Pacific region and has significant operations in China, Japan, and South Korea. Westlake’s competitors include Sankyo Kasei Corp, NOF Corp, and Shikoku Chemicals Corp.
– Sankyo Kasei Corp ($TSE:8138)
Sankyo Kasei Corp is a Japanese company with a market cap of 4.24B as of 2022. The company has a Return on Equity of 1.69%. Sankyo Kasei Corp is involved in the manufacturing of chemicals, pharmaceuticals, and other products.
– NOF Corp ($TSE:4403)
NOF Corp is a Japanese chemical company with a market cap of 425.07B as of 2022. The company has a Return on Equity of 12.06%. NOF Corp is a leading manufacturer of chemicals, plastics, and other materials. The company’s products are used in a wide variety of industries, including automotive, electronics, and construction. NOF Corp is a publicly traded company on the Tokyo Stock Exchange.
– Shikoku Chemicals Corp ($TSE:4099)
Shikoku Chemicals Corp is a Japanese chemical company with a market cap of 67.17B as of 2022. The company has a Return on Equity of 7.74%. Shikoku Chemicals Corp is engaged in the manufacture and sale of chemicals and related products. The company’s products include plastics, resins, pigments, dyes, and other chemicals.
Summary
Westlake Chemical‘s financial results for the fiscal year ending December 31 2022, showed a 64.0% drop in total revenue and a 5.9% decrease in net income compared to the previous year. On February 21, 2023, the stock price dropped in response to this news, indicating investors are wary of the company’s declining performance. Analysts suggest that Westlake Chemical may need to take additional steps to improve their balance sheet and ensure a more solid financial future. Investors should consider researching the company further and making an informed decision before investing in Westlake Chemical.
