The following is a summary of the Stepan Company (SCL) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Stepan Company reported a second quarter adjusted EBITDA of $47.7 million, up 4% year-over-year.

• Net sales in Q2 2024 decreased by 4% year-over-year, mainly due to lower selling prices which were partially offset by a 4% increase in global sales volume.

• Free cash flow for the first half of the year was reported at $11 million, with the company remaining confident in achieving positive free cash flow by the end of 2024.

Business Progress:

• The company is on track to meet its $50 million cost reduction goal for 2024.

• Significant volume growth was noted in Surfactants, particularly in the Laundry and Cleaning, Construction, Industrial Solutions, and Oilfield end markets, as well as in Latin American markets.

• Stepan's Polymers business saw an increase in Rigid and Specialty Polyols volumes, albeit partially offset by lower Phthalic Anhydride volumes due to production issues.

Opportunities:

• The company continues to experience strong volume growth in several core markets, which supports the ongoing investment in business operations and return of cash to shareholders.

Risks:

• Operational issues at the Millsdale site led to higher costs.

• A fraud event in one of the company's Asian subsidiaries resulted in a $3.5 million pre-tax charge for the quarter, with an expected similar charge in Q3.

More details: Stepan IR

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