DuPont Takes Aggressive Actions to Strengthen Competitiveness and Increase Cash Flow

09-Dec-2008 - USA

DuPont announced further actions to address current market challenges and strengthen the company’s competitiveness in 2009, including continued focus on maximizing cash flow, and provided earnings guidance for the fourth quarter 2008 and the full year 2009.

A steep global decline in construction and motor vehicle sales and consumer spending has resulted in declining industrial production, intensified by inventory reductions across most supply chains. These conditions have precipitated a sharp downturn in demand during the fourth quarter.

“We have taken immediate and aggressive actions to maximize cash flow by reducing cost, working capital and capital expenditures in response to current market challenges,” said DuPont Chairman and CEO Chad Holliday. “We will build on our strong financial and market positions and continue prudent financial discipline in navigating through this challenging economic environment. We are providing 2009 earnings guidance and underlying assumptions in our effort to be as transparent as possible with respect to the current and expected impact of the global recession. We are, however, realistic about the potential for further change and we will adjust actions as conditions warrant.”

Full-year 2008 free cash flow is expected to be about USD 1.3 billion, as planned, with working capital improvements offsetting earnings decline. Free cash flow will increase to about USD 2.5 billion in 2009, reflecting a planned USD 1 billion net working capital reduction and a 10 to 20 percent reduction in capital spending.

DuPont is taking actions to deliver in 2009 USD 600 million in fixed cost productivity improvements, excluding volume and currency, in addition to about USD 130 million in cost reductions from its restructuring plan. This compares to an original 2009 cost productivity plan of USD 200 million.

DuPont has commenced a restructuring plan with an associated pre-tax charge of about USD 500 million in the fourth quarter resulting in a pre-tax earnings increase of about USD 130 million for 2009, and approximately a USD 250 million annual run rate.

The company expects a loss of USD .20 to USD .30 per share for the fourth quarter 2008, excluding an estimated USD .40 per share significant item charge for the company’s restructuring plan. On a reported basis, the company expects fourth quarter earnings to be a loss of USD .60 to USD .70 per share.

Full-year 2009 earnings are expected to be about USD 2.25 to USD 2.75 per share.

https://www.chemeurope.com/en/news/91547/dupont-takes-aggressive-actions-to-strengthen-competitiveness-and-increase-cash-flow.html