Home » Sales Decline 10% for Ashland in Fiscal 2020 Third Quarter
Ashland Global Holdings Inc. recently announced preliminary financial results for its 2020 fiscal third quarter, which ended June 30, 2020. The company reports that, as expected, its portfolio demonstrated resilience during the quarter, despite the global macroeconomic uncertainty brought on by the COVID-19 pandemic. Sales were $574 million, down 10% vs. the prior-year quarter.
“Results in the third quarter were consistent with the update we issued on July 17,” said Guillermo Novo, chairman and CEO. “Our results in the quarter demonstrate the value of our leadership positions in high-quality end markets and the importance of the actions we are taking internally. Our priorities continue to be the health and safety of our employees and the continued supply of products to customers in the critical industries which we serve. Our consumer business units performed particularly well as we experienced significantly stronger demand for pharmaceutical excipients, biofunctional ingredients and additives for hand sanitizers. While our industrial businesses felt the impact of reduced global demand during April and May, the teams began to see signs of improving demand trends in June.
“Our internal actions are also driving improvements to our cost structure and profitability. The combined benefit of cost reductions, improved product mix and lower raw-material costs yielded Adjusted EBITDA growth of 2% during the quarter. Our cost-reduction plans remain on track to generate $40 million of run-rate savings by the end of the fiscal year. In addition, we plan to incur $20 million to $30 million of the previously-disclosed reduced fixed-cost absorption related to inventory-control measures during the fiscal-fourth quarter. I am confident that these continued internal actions mean we are well positioned for the upcoming fiscal year.”
Sales were $344 million in the Consumer Specialties segment, down 1% from the prior-year quarter, driven by a three-percentage-point decline associated with previously communicated businesses losses and a one-percentage-point decline as a result of unfavorable foreign currency. Excluding these items, the Life Sciences and Personal Care & Household business units reportedly performed well during the quarter, with particular strength demonstrated by pharmaceutical excipients, bio-functional ingredients, and additives for hand sanitizers.
In the Industrial Specialties segment, sales were $205 million, down 23% from the prior-year quarter, due primarily to lower industrial demand across the globe reflecting the impact of the COVID-19 pandemic. Unfavorable foreign currency also reduced sales by 1%.
The Intermediates & Solvents segment saw sales decline 10% compared to the prior-year quarter, to $37 million. The decrease was due primarily to lower pricing on intercompany sales of butanediol and merchant-derivative sales.