Olin Corporation (OLN) has reported 196.61 percent jump in profit for the quarter ended Sep. 30, 2016. The company has earned $17.50 million, or $0.11 a share in the quarter, compared with $5.90 million, or $0.08 a share for the same period last year.
Revenue during the quarter surged 172.25 percent to $1,452.70 million from $533.60 million in the previous year period. Gross margin for the quarter contracted 221 basis points over the previous year period to 11.59 percent. Total expenses were 95.33 percent of quarterly revenues, down from 95.71 percent for the same period last year. This has led to an improvement of 38 basis points in operating margin to 4.67 percent.
Operating income for the quarter was $67.80 million, compared with $22.90 million in the previous year period.
John E. Fischer, president and chief executive officer, said, "Third quarter results showed sequential improvement across all three segments from the second quarter. Despite higher natural gas and purchased ethylene costs in the third quarter, Chlor Alkali Products and Vinyls segment earnings improved as a result of higher caustic soda prices and higher volumes."
Operating cash flow improves significantly
Olin Corporation has generated cash of $407.10 million from operating activities during the nine month period, up 253.69 percent or $292 million, when compared with the last year period.
The company has spent $397.20 million cash to meet investing activities during the nine month period as against cash outgo of $51.10 million in the last year period. It has incurred net capital expenditure of $159 million on net basis during the nine month period, up 189.62 percent or $104.10 million from year ago period.
The company has spent $275.60 million cash to carry out financing activities during the nine month period as against cash inflow of $66.80 million in the last year period.
Cash and cash equivalents stood at $127 million as on Sep. 30, 2016, down 50 percent or $127 million from $254 million on Sep. 30, 2015.
Working capital increases sharply
Olin Corporation has recorded an increase in the working capital over the last year. It stood at $658.40 million as at Sep. 30, 2016, up 132.49 percent or $375.20 million from $283.20 million on Sep. 30, 2015. Current ratio was at 1.74 as on Sep. 30, 2016, up from 1.48 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 34 days for the quarter from 68 days for the last year period. Days sales outstanding went down to 35 days for the quarter compared with 54 days for the same period last year.
Days inventory outstanding has decreased to 22 days for the quarter compared with 45 days for the previous year period. At the same time, days payable outstanding went down to 24 days for the quarter from 31 for the same period last year.
Debt increases substantially
Olin Corporation has witnessed an increase in total debt over the last one year. It stood at $3,677.80 million as on Sep. 30, 2016, up 448.76 percent or $3,007.60 million from $670.20 million on Sep. 30, 2015. Total debt was 41.83 percent of total assets as on Sep. 30, 2016, compared with 24.74 percent on Sep. 30, 2015. Debt to equity ratio was at 1.58 as on Sep. 30, 2016, up from 0.64 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 1.43 for the quarter from 1.59 for the same period last year.
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