https://www.nasdaq.com/articles/olin-oln-to-cut-50-chlor-alkali-capacity-at-alabama-plant-2021-03-23


Olin (OLN) to Cut 50% Chlor Alkali Capacity at Alabama Plant
CONTRIBUTOR
Zacks Equity Research  Zacks
PUBLISHED
MAR 23, 2021 9:26AM EDT
Olin Corporation OLN recently announced plans to permanently shut down around 50% of its diaphragm-grade chlor alkali capacity (roughly 200,000 tons) at its McIntosh, AL facility.
The closure is expected to be cash flow accretive and completed by Mar 31, 2021. The first-quarter results of the company are projected to include about $5 million of restructuring charges related to this plan.
This action is part of the company's efforts to right-size its asset base, which will help it achieve reinvestment economics across its complete Electrochemical Unit portfolio. The shareholders can expect Olin to continue to take high-capital, non-accretive assets off its balance sheet as current contractual supply obligations end. It will focus its resources toward unleashing true value potential, the company noted.
Shares of Olin have surged 266% in the past year compared with 98.1% rise of the industry.

Olin recently updated its outlook for the first quarter of 2021. It now projects first-quarter adjusted EBITDA in the range of $475-$500 million, higher than $400-$425 million expected earlier.
The revised projection includes a net one-time benefit associated with Olin's customary financial hedges and contracts, maintained to provide protection from rapid and dramatic changes in energy costs. This is partly offset by unabsorbed fixed manufacturing expenses, reduced profit from lost sales and storm-related maintenance costs. The outlook for the first quarter has further upside potential related to the final settlement of these one-time items linked with the winter storm Uri.
Olin Corporation Price and Consensus
 



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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