The following is a summary of the Stepan Company (SCL) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Stepan Company reported an adjusted EBITDA of $53 million in Q3 2024, up 11% compared to the previous year, driven primarily by gains in the Surfactant business.

• Adjusted net income rose significantly, reaching $23.7 million, a 61% increase. This was aided by better Surfactant and Specialty Products results and a lower tax rate.

• Year-to-date adjusted EBITDA was $152 million, reflecting a 7% improvement, fueled by increased volumes and margins.

Business Progress:

• The appointment of Luis Rojo as President and CEO marks a strategic shift, focusing on expanding profit recovery and shareholder value.

• Stepan has maintained a steady effort towards a $50 million cost reduction goal for the year through supply chain discipline and workforce productivity.

• Surfactant business saw robust volume growth in Agricultural, Oilfield, and Construction end markets, with a plan to drive further growth in these areas.

• Polymer segment faced challenges with a decline in sales due to competitive pressures and macroeconomic conditions, yet Specialty Polyols showed slight growth.

• Introduction of new products in the Spray Foam market and nearing completion of the Pasadena production facility.

Opportunities:

• The company is set to realize benefits from investments in Surfactant markets, particularly Agriculture and Oilfield where strong double-digit growth is noted. They also anticipate resuming growth in the Rigid Polyol market as macroeconomic stability returns.

• Expansion into the Spray Foam end market represents a strategic growth avenue, and leveraging their newly expanded Low 1,4-Dioxane production capacity serves a growing demand in sustainable products.

Risks:

• Significant risks were acknowledged in the Polymer segment, linked to global macroeconomic uncertainties including high interest rates that led to decreased demand and competitive pressures, impacting volumes negatively.

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