Winchester Parent Reduces Adjusted EBITDA Outlook On Epoxy Plant Turnaround Delays

Olin Corp., the parent company of Winchester Ammunition, updated its outlook for the second quarter of 2023 as plant turnaround costs related to its epoxy business and deteriorating market conditions led the company to reduce its Adjusted EBITDA forecast.

Olin Corp.’s adjusted EBITDA is expected to be in the $350 million to $360 million range, lower than previously expected, due mainly to an approximately $50 million impact from an extended vinyl chloride monomer plant turnaround and to a lower market participation rate by Olin in the face of deteriorating market conditions.

The planned vinyl chloride monomer plant maintenance turnaround at Olin Corp.’s Freeport, TX facility required an approximately seven-week extension, resulting in higher unabsorbed fixed manufacturing costs, reduced profit from lost sales and higher turnaround expense. The vinyl chloride monomer plant returned to operations at a reduced rate.

Olin also decided to cease all operations at its Gumi, South Korea facility, reduce epoxy resin and upstream capacity at its Freeport, TX facility, and reduce its sales and support staffing in Asia.

Olin’s second quarter 2023 results are forecasted to include approximately $12 million of restructuring charges associated with these plans, of which approximately $6 million represents non-cash asset impairment charges. The cash component of these charges is expected to be paid over the next year.

“The restructuring actions announced on March 21, 2023, and in this announcement, will complete the rightsizing of the Epoxy business and are expected to deliver $50 million of improved annual EBITDA beginning in the fourth quarter of 2023, continuing our commitment to elevate our Epoxy business earnings to a more sustainable level. Through these actions, we will have configured our global Epoxy asset capability to improve profitability through future recessions,” remarked Scott Sutton, chairman, president, and CEO. “Both of our chemical businesses continue to experience a challenging demand environment. Our team remains focused on demonstrating our winning model’s resilience and ability to deliver significantly higher trough level adjusted EBITDA compared to Olin’s historical approach.”