Westlake Corp (WLK) 2023 Q1 法說會逐字稿

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Westlake Corporation First Quarter 2023 Earnings Conference Call. (Operator Instructions) As a reminder, ladies and gentlemen, this conference is being recorded today, May 4, 2023.

早上好，女士們先生們，感謝你們的支持。歡迎參加 Westlake Corporation 2023 年第一季度收益電話會議。 （操作員說明）女士們先生們，謹此提醒，本次會議將於今天（2023 年 5 月 4 日）錄製。

I would now like to turn the call over to your host today, Jeff Holy, Westlake's Vice President and Treasurer. Sir, you may begin.

現在我想將電話轉給今天的東道主、西湖大學副總裁兼財務主管傑夫·霍利 (Jeff Holy)。先生，您可以開始了。

Thank you. Good morning, everyone, and welcome to the Westlake Corporation conference call to discuss our first quarter 2023 results. I'm joined today by Albert Chao, our President and CEO; Steve Bender, our Executive Vice President and Chief Financial Officer; and other members of our management team.

謝謝。大家早上好，歡迎參加 Westlake Corporation 電話會議，討論我們 2023 年第一季度的業績。今天我們的總裁兼首席執行官 Albert Chao 也加入了我的行列。 Steve Bender，我們的執行副總裁兼首席財務官；以及我們管理團隊的其他成員。

During the call, we will refer to our 2 reporting segments: Performance and Essential Materials or PEM or Materials; and Housing and Infrastructure Products, which we refer to as HIP or Products. Today's conference call will begin with Albert, who will open with a few comments regarding Westlake's performance. Steve will then discuss our financial and operating results, after which Albert will add a few concluding comments, and we will open the call up to questions.

在電話會議期間，我們將提及我們的 2 個報告部分：性能和基本材料或 PEM 或材料；住房和基礎設施產品，我們稱之為 HIP 或產品。今天的電話會議將由 Albert 開始，他將首先對 Westlake 的表現發表一些評論。然後史蒂夫將討論我們的財務和運營業績，之後艾伯特將添加一些結論性意見，我們將開始提問。

Today, management is going to discuss certain topics that will contain forward-looking information that is based on management's beliefs as well as assumptions made by and information currently available to management. These forward-looking statements suggest predictions or expectations and thus are subject to risks or uncertainties. These risks and uncertainties are discussed in Westlake's Form 10-K for the year ended December 31, 2022, and other SEC filings. We encourage you to learn more about these factors that could lead our actual results to differ by reviewing these SEC filings which are also available on our Investor Relations website.

今天，管理層將討論某些主題，其中包含基於管理層信念以及管理層做出的假設和當前可獲得的信息的前瞻性信息。這些前瞻性陳述暗示了預測或預期，因此存在風險或不確定性。 Westlake 截至 2022 年 12 月 31 日止年度的 10-K 表格以及其他 SEC 文件中討論了這些風險和不確定性。我們鼓勵您通過查看這些 SEC 文件（也可以在我們的投資者關係網站上找到）來詳細了解這些可能導致我們的實際結果有所不同的因素。

This morning, Westlake issued a press release with details of our first quarter results. This document is available in the Press Release section of our website at westlake.com. We have also included an earnings presentation, which can be found in the Investor Relations section on our website. A replay of today's call will be available beginning today, 2 hours following the conclusion of this call. This replay may be accessed via Westlake's website.

今天早上，Westlake 發布了一份新聞稿，詳細介紹了我們第一季度的業績。本文件可在我們網站 westlake.com 的新聞稿部分獲取。我們還提供了收益演示，您可以在我們網站的投資者關係部分找到該演示。從今天開始，即本次電話會議結束後 2 小時後，即可重播今天的電話會議。可以通過 Westlake 的網站訪問此重播。

Please note that information reported on this call speaks only as of today, May 4, 2023. And therefore, you're advised that time-sensitive information may no longer be accurate as of the time of any replay. Finally, I would advise you that this conference call is being broadcast live through an Internet webcast system that can be accessed on our web page at westlake.com.

請注意，本次電話會議中報告的信息僅截至今天（2023 年 5 月 4 日）。因此，我們建議您，時間敏感的信息在任何重播時可能不再準確。最後，我建議您，本次電話會議將通過互聯網網絡廣播系統進行現場直播，您可以通過我們的網頁 westlake.com 訪問該系統。

Now I would like to turn the call over to Albert Chao. Albert?

現在我想把電話轉給Albert Chao。阿爾伯特？

Thank you, Jeff. Good morning, everyone. We appreciate you joining us to discuss our first quarter 2023 results. For the first quarter of 2023, we achieved sales of $3.4 billion, net income of $394 million and EBITDA of $825 million. These solid results reflect significant improvement in volumes, margins and earnings from the fourth quarter of 2022 as customer destocking activity moderated, end market demand improved, and we benefited from lower feedstock fuel and power costs.

謝謝你，傑夫。大家，早安。我們感謝您加入我們討論我們 2023 年第一季度的業績。 2023 年第一季度，我們實現銷售額 34 億美元，淨利潤 3.94 億美元，EBITDA 8.25 億美元。這些穩健的業績反映出，隨著客戶去庫存活動放緩、終端市場需求改善，以及我們受益於原料燃料和電力成本下降，自 2022 年第四季度以來，銷量、利潤率和收益均顯著改善。

As demand improved in the first quarter, we shifted sales volumes from exports to domestic markets, contributing to better sales mix and higher integrated margins. We also benefited from lower feedstock and energy costs compared to the levels of 2022 as our globally advantaged low-cost feedstock and energy position in the U.S. Gulf Coast improved further, but we also saw lower energy costs in Europe as well. Our results for the first quarter also reflected the achievement of approximately $25 million of cost savings in this quarter towards our previously communicated $55 million to $105 million of targeted 2023 cost savings. Each of these factors supported solid improvement in our integrated margins on the fourth quarter of 2022.

隨著第一季度需求的改善，我們將銷售量從出口轉向國內市場，有助於改善銷售組合和提高綜合利潤率。與 2022 年的水平相比，我們還受益於原料和能源成本的下降，因為我們在美國墨西哥灣沿岸的全球優勢低成本原料和能源地位進一步改善，但我們也看到歐洲的能源成本下降。我們第一季度的業績還反映出，本季度實現了約 2500 萬美元的成本節省，而我們之前公佈的 2023 年成本節省目標為 5500 萬至 1.05 億美元。所有這些因素都支持我們 2022 年第四季度綜合利潤率的穩步改善。

Looking at our first quarter financial results, I'm particularly proud of our HIP segment performance, which maintained EBITDA margin of 20%, similar to the first quarter of 2022. These margins were achieved despite a 21% decline in volume when compared to the prior year period, which was driven by the decline in home building activity due to lower affordability from higher mortgage rates.

看看我們第一季度的財務業績，我對我們的 HIP 部門的業績感到特別自豪，該部門的 EBITDA 利潤率保持在 20%，與 2022 年第一季度相似。儘管與 2022 年第一季度相比，銷量下降了 21%，但仍實現了這些利潤率。去年同期，這是由於抵押貸款利率上升導致負擔能力下降導致房屋建築活動下降所致。

This demonstrates the benefit of our product mix and strength of our brands. The margin stability of these businesses along with the long-term growth opportunity in the U.S. housing market were key reasons why we invested in the HIP segment in 2021 through the acquisitions of Boral Building Products, LASCO Fittings and Dimex. We continue to have a positive long-term view of the U.S. housing market, driven by the deficit in new housing construction since the Great Recession in 2020 -- 2008 and increasing demographic demand.

這證明了我們產品組合的優勢和我們品牌的實力。這些業務的利潤率穩定性以及美國房地產市場的長期增長機會是我們在 2021 年通過收購 Boral Building Products、LASCO Fittings 和 Dimex 投資 HIP 領域的關鍵原因。受 2020 年至 2008 年經濟大衰退以來新住房建設赤字和人口需求增加的推動，我們繼續對美國房地產市場持積極的長期看法。

Turning to our PEM segment. We continue to operate with agility as we navigated the current market dynamics by shifting PVC and polyethylene sales volume back from export markets to rebounding domestic markets, while solid chlor-alkali markets drove higher average selling prices for both chlorine and caustic soda in North America. Lower feedstock energy prices, combined with our cost reduction actions, drove significant improvement in integrated margins from the fourth quarter of 2022. Overall, I'm very pleased with our first quarter performance and the team's ability to successfully adjust to rapidly changing end market trends.

轉向我們的 PEM 部分。我們通過將 PVC 和聚乙烯銷量從出口市場轉移回反彈的國內市場，繼續靈活運營，駕馭當前的市場動態，同時固體氯鹼市場推高了北美氯和燒鹼的平均售價。較低的原料能源價格，加上我們的成本削減行動，推動了 2022 年第四季度以來綜合利潤率的顯著改善。總體而言，我對我們第一季度的業績以及團隊成功適應快速變化的終端市場趨勢的能力感到非常滿意。

I would now like to turn the call over to Steve to provide more detail on our financial results for the first quarter 2023.

我現在想將電話轉給 Steve，以提供有關我們 2023 年第一季度財務業績的更多詳細信息。

Thank you, Albert, and good morning, everyone. Westlake reported net income of $394 million or $3.05 per share in the first quarter of 2023 on sales of $3.4 billion. Net income for the first quarter of 2023 decreased $362 million from the first quarter of 2022 as a result of lower average selling prices and integrated margins, particularly for PVC, polyethylene, epoxy resins, and lower production and sales volume in each segment.

謝謝你，阿爾伯特，大家早上好。 Westlake 報告 2023 年第一季度淨利潤為 3.94 億美元，即每股 3.05 美元，銷售額為 34 億美元。 2023年第一季度的淨利潤比2022年第一季度減少了3.62億美元，原因是平均銷售價格和綜合利潤率下降，特別是PVC、聚乙烯、環氧樹脂，以及各細分市場的產銷量下降。

When compared to the fourth quarter of 2022, net income increased by $162 million in the first quarter of 2023 due to higher production and sales volume in each segment lower feedstock fuel and power cost in North America and Europe. The key market conditions that we experienced in the fourth quarter of 2022 improved throughout the first quarter of 2023, as destocking abated and North American demand for PVC and polyethylene improved, which allowed us to shift sales volumes back to domestic from export markets in this stronger environment, driving higher netbacks.

與 2022 年第四季度相比，2023 年第一季度淨利潤增加了 1.62 億美元，原因是北美和歐洲各細分市場的產量和銷量增加以及原料燃料和電力成本降低。我們在 2022 年第四季度經歷的主要市場狀況在 2023 年第一季度有所改善，因為去庫存有所減少，北美對 PVC 和聚乙烯的需求有所改善，這使我們能夠將銷量從出口市場轉移回國內。環境，推動更高的淨回報。

The customer destocking in our HIP segment that occurred in the second half of 2022 also abated which, along with the seasonal uptick in spring construction activity drove a 10% sequential increase in HIP volumes. Overall, we were pleased with the first quarter 2023 operational and financial results and we are cautiously optimistic about demand trends as we move into the seasonally stronger second quarter. For the first quarter of 2023, our utilization of the FIFO method of accounting resulted in an unfavorable pretax impact of $45 million compared to what earnings would have been reported on the LIFO method. This is only an estimate and has not been audited.

2022 年下半年，我們的 HIP 部門的客戶去庫存也有所減少，加上春季建築活動的季節性上升，推動 HIP 銷量環比增長 10%。總體而言，我們對 2023 年第一季度的運營和財務業績感到滿意，隨著進入季節性強勁的第二季度，我們對需求趨勢持謹慎樂觀態度。 2023 年第一季度，我們採用先進先出會計方法，與採用後進先出方法報告的收益相比，產生了 4500 萬美元的不利稅前影響。這只是一個估計，未經審計。

Moving to our segment performance. Our performance in the Central Materials segment first quarter 2023 EBITDA of $615 million decreased $456 million from the first quarter of 2022. As compared to the prior year period, Performance Materials sales in the first quarter decreased $647 million, largely driven by lower average selling prices, particularly for PVC resin in addition to lower sales volumes across our portfolio.

轉向我們的細分市場表現。 2023 年第一季度我們中央材料部門的業績 EBITDA 為 6.15 億美元，比 2022 年第一季度減少了 4.56 億美元。與去年同期相比，第一季度高性能材料銷售額減少了 6.47 億美元，主要是由於平均售價下降，尤其是 PVC 樹脂，此外我們的產品組合銷量也有所下降。

Essential Materials sales in the first quarter of 2023 decreased $164 million over the first quarter of 2022, primarily driven by higher average selling prices for caustic soda. As compared to the first quarter of 2022, our earnings were impacted by lower integrated margins for all of our Performance Material products, including PVC, epoxy, polyethylene and lower production and sales volumes across most product lines. These headwinds were particularly -- were partially offset by higher average selling prices and Essential Materials along with lower fuel and energy prices.

2023 年第一季度基本材料銷售額比 2022 年第一季度減少 1.64 億美元，主要是由於燒鹼平均售價上漲。與 2022 年第一季度相比，我們的收益受到所有高性能材料產品（包括 PVC、環氧樹脂、聚乙烯）綜合利潤率下降以及大多數產品線產量和銷量下降的影響。這些不利因素尤其被平均銷售價格和基本材料上漲以及燃料和能源價格下降所部分抵消。

PEM's segment EBITDA of $615 million in the first quarter increased $172 million from the fourth quarter of 2022 as a result of 6 key elements. Higher production and sales volumes, particularly in PVC and epoxy resins, improved Performance Materials sales mix as volumes in polyethylene and PVC shifted to domestic markets, higher Essential Materials average selling prices driven by caustic soda, lower feedstock and energy cost, reduced turnaround activity, particularly in epoxy, and benefits from the cost savings program we previously announced.

PEM 部門第一季度 EBITDA 為 6.15 億美元，較 2022 年第四季度增加 1.72 億美元，原因有 6 個關鍵因素。產量和銷量增加，特別是 PVC 和環氧樹脂，隨著聚乙烯和 PVC 的產量轉移到國內市場，高性能材料銷售組合得到改善，燒鹼推動基本材料平均售價上漲，原料和能源成本降低，周轉活動減少，特別是在環氧樹脂領域，並受益於我們之前宣布的成本節約計劃。

Turning to our Housing and Infrastructure Products segment. We saw improved demand driven by seasonal uptick compared to the fourth quarter of 2022 as our customers saw improved demand in their markets. HIP segment EBITDA of $205 million for the first quarter of 2023 decreased $53 million when compared to the first quarter 2022. Housing Products sales decreased $154 million from the prior year period as volumes declined by double-digit rates across all product categories.

轉向我們的住房和基礎設施產品部門。與 2022 年第四季度相比，我們看到季節性增長推動了需求的改善，因為我們的客戶看到了其市場需求的改善。 2023 年第一季度 HIP 部門的 EBITDA 為 2.05 億美元，與 2022 年第一季度相比減少了 5300 萬美元。住房產品銷售額比去年同期減少了 1.54 億美元，所有產品類別的銷量均出現兩位數下降。

Infrastructure Products sales fell $63 million from the first quarter of 2022, primarily due to a decline in sales volumes of Infrastructure Products servicing fresh and wastewater applications. The volume decline in Housing and Infrastructure Products were driven by lower housing starts and lower inventories carried by our customers in the first quarter of 2023. These volume declines were only partially offset by higher average selling prices and lower raw materials cost, along with the benefits realized from our cost savings program.

基礎設施產品銷售額較 2022 年第一季度下降 6300 萬美元，主要是由於為新鮮和廢水應用提供服務的基礎設施產品銷量下降。住房和基礎設施產品銷量下降的原因是 2023 年第一季度新屋開工率下降和客戶庫存減少。這些銷量下降僅部分被平均銷售價格上漲和原材料成本下降以及效益所抵消。通過我們的成本節約計劃實現。

When compared to the fourth quarter of 2022, HIP segment EBITDA of $205 million increased $72 million. Housing Products sales of $818 million in the first quarter of 2023 increased $60 million, while Infrastructure Products of $189 million in the first quarter increased $9 million from the fourth quarter of 2022. The higher sales and earnings were the result of lower raw material cost and broad-based increases in sales volumes due to the moderating customer destocking and seasonal construction trends that I previously discussed. The overall macroeconomic backdrop remains uncertain and our customers have kept their inventories rather tight as they look for improvements in economic activity.

與 2022 年第四季度相比，HIP 部門 EBITDA 為 2.05 億美元，增加了 7200 萬美元。 2023 年第一季度住房產品銷售額為 8.18 億美元，增加了 6000 萬美元，而基礎設施產品第一季度銷售額為 1.89 億美元，較 2022 年第四季度增加了 900 萬美元。銷售額和收益的增加是由於原材料成本下降和由於我之前討論過的客戶去庫存和季節性建設趨勢的放緩，銷量普遍增加。整體宏觀經濟背景仍然存在不確定性，我們的客戶在尋求經濟活動改善的同時，庫存仍相當緊張。

In our HIP segment, while the first quarter experienced the beginning of the seasonal increase in construction activity in North America, with March housing starts reported at $1.42 million similar to the average level for the second half of 2022, we continue to see our HIP customers remaining cautious in building inventory until they see less uncertainty in the economy. Therefore, we are controlling our cost working closely with our customers to provide the PEM products they demand and supporting our building products customers with the premium brands and products to meet their building and remodeling needs.

在我們的 HIP 領域，雖然第一季度北美建築活動開始季節性增長，3 月份新屋開工額為 142 萬美元，與 2022 年下半年的平均水平相似，但我們繼續看到我們的 HIP 客戶在看到經濟不確定性減少之前，他們在建立庫存方面仍保持謹慎態度。因此，我們與客戶密切合作控製成本，提供他們所需的 PEM 產品，並為我們的建築產品客戶提供優質品牌和產品，以滿足他們的建築和改造需求。

Turning to the balance sheet and cash flows. As of March 31, 2023, cash and cash equivalents were $2.4 billion and total debt was $4.9 billion for a staggered long-term fixed rate debt maturity schedule. For the first quarter of 2023, net cash provided by operating activities was $512 million in CapEx expenditures were $267 million, resulting in free cash flow of $245 million. We continue to look for opportunities to strategically deploy our balance sheet in a shareholder-friendly manner to create long-term value and reward our shareholders.

轉向資產負債表和現金流量。截至 2023 年 3 月 31 日，按照交錯的長期固定利率債務到期時間表，現金和現金等價物為 24 億美元，債務總額為 49 億美元。 2023年第一季度，經營活動提供的淨現金為5.12億美元，資本支出為2.67億美元，自由現金流為2.45億美元。我們繼續尋找機會以有利於股東的方式戰略性地部署我們的資產負債表，以創造長期價值並回報股東。

Now let me provide some guidance for your models. We are reaffirming our earlier guidance for full year 2023 revenue in our Housing and Infrastructure Products segment to be between $4.3 billion and $4.8 billion with an EBITDA margin in the high teens. We continue to target $55 million to $105 million of annualized savings in 2023, with approximately $25 million already achieved in the first quarter. Our significant cash balance and investment grade credit rating position allow us to invest in our business and support our customers.

現在讓我為您的模型提供一些指導。我們重申之前對住房和基礎設施產品部門 2023 年全年收入的指導，即在 43 億美元至 48 億美元之間，EBITDA 利潤率高達十幾億美元。我們繼續設定 2023 年年度節省 5500 萬至 1.05 億美元的目標，第一季度已實現約 2500 萬美元。我們大量的現金餘額和投資級信用評級使我們能夠投資於我們的業務並支持我們的客戶。

We continue to expect total capital expenditures for 2023 to be approximately $1 billion, which is unchanged from our earlier guidance and is similar to our depreciation and amortization run rate. As a reminder, this includes a planned 30-day turnaround at our Calvert City ethylene unit in the second quarter of 2023. For the full year of 2023, we expect our effective tax rate to be approximately 23%. We also continue to expect cash interest expense to be approximately $160 million.

我們仍然預計 2023 年的總資本支出約為 10 億美元，這與我們之前的指導不變，並且與我們的折舊和攤銷運行率相似。提醒一下，這包括我們卡爾弗特市乙烯裝置計劃於 2023 年第二季度進行 30 天的周轉。對於 2023 年全年，我們預計有效稅率約為 23%。我們還繼續預計現金利息支出約為 1.6 億美元。

Now let me turn the call over to Albert to provide a current outlook for our business. Albert?

現在讓我將電話轉給阿爾伯特，以提供我們當前業務的前景。阿爾伯特？

Thank you, Steve. Since the fourth quarter of 2022, the economic environment has improved, but with some mixed economic signals. This improvement in the economy drove demand growth for all our products during the first quarter of 2023 as compared to the fourth quarter of 2022. Additionally, lower natural gas, ethane and power costs further improved our structurally advantaged low-cost position in North America. Taken together, the volume improvement and lower cost position drove the improved first quarter results and highlights the strength of our business in the current economic environment.

謝謝你，史蒂夫。 2022年第四季度以來，經濟環境有所改善，但經濟信號好壞參半。與 2022 年第四季度相比，經濟的改善推動了 2023 年第一季度我們所有產品的需求增長。此外，天然氣、乙烷和電力成本的下降進一步改善了我們在北美的結構性優勢低成本地位。總而言之，銷量的提高和成本的降低推動了第一季度業績的改善，並凸顯了我們在當前經濟環境下的業務實力。

Looking ahead, we are cautiously optimistic that economic conditions have stabilized and believe demand for our products will continue to improve as 2023 progresses. We expect demand from China to continue to improve which would spur demand for many of our products, improving integrated margins. We also expect demand in the U.S. to improve with increasing industrial and construction activity.

展望未來，我們對經濟狀況已經穩定持謹慎樂觀態度，並相信隨著 2023 年的進展，對我們產品的需求將繼續改善。我們預計中國的需求將繼續改善，這將刺激對我們許多產品的需求，從而提高綜合利潤率。我們還預計，隨著工業和建築活動的增加，美國的需求將會改善。

In our HIP segment, the overall housing market continues to be impacted by affordability concerns resulting from the higher mortgage rates. Yes, we have seen homebuilders taking action to address these conditions and adjust prices, including increased incentives. Our strong brand and product mix of 50% new construction and 50% repair and remodeling has remained resilient and supportive of margins in these market conditions. Longer term, U.S. housing remains structurally undersupplied due to the homebuilding deficit since 2007, relative to the 50-year average of 1.5 million new homes built annually and improving demographics support more first-time homebuyers over the coming decade. As a result, we continue to have a very positive outlook on the long-term fundamentals for our building products business.

在我們的 HIP 領域，整個住房市場繼續受到抵押貸款利率上升導致的負擔能力擔憂的影響。是的，我們已經看到房屋建築商採取行動來解決這些問題並調整價格，包括增加激勵措施。我們強大的品牌和產品組合（50% 是新建建築，50% 是維修和改造）在這些市場條件下仍然保持彈性並支撐利潤。從長遠來看，由於自 2007 年以來的住房建設赤字，美國住房仍然結構性供應不足，而 50 年來平均每年建造 150 萬套新房，而且人口結構的改善將在未來十年支持更多的首次購房者。因此，我們對建築產品業務的長期基本面繼續抱有非常積極的前景。

In our PEM segment, growth in global population and continuing urbanization, keep the outlook remaining favorable as Performance Materials using everyday products such as housing, packaging, health care, automotive and wind energy drive demand for PVC, polyethylene and epoxy. At Westlake, we recognized improving the sustainability of our products and operations remains critical to our future success. In the first quarter of 2023, we continue to make progress towards our goal to reduce our carbon intensity by 20% by 2030. We also made significant progress in the commercialization of many of our sustainable products. These exciting products include our one-pellet solution, an efficient polyethylene solution incorporating post-consumer resin, while maintaining its strength.

在我們的 PEM 領域，全球人口的增長和持續的城市化使前景保持樂觀，因為使用住房、包裝、醫療保健、汽車和風能等日常產品的高性能材料推動了對 PVC、聚乙烯和環氧樹脂的需求。在 Westlake，我們認識到提高產品和運營的可持續性對於我們未來的成功仍然至關重要。 2023 年第一季度，我們繼續朝著到 2030 年將碳強度降低 20% 的目標取得進展。我們還在許多可持續產品的商業化方面取得了重大進展。這些令人興奮的產品包括我們的單粒解決方案，這是一種包含消費後樹脂的高效聚乙烯解決方案，同時保持其強度。

In our molecular already entered PVC pipe, or PVCO which provides a lighter weight and more durable PVC pipe with a lower carbon footprint than any other water main pipe material. Our Dimex business acquired in 2021 is one of the largest recycling of plastic materials in the United States, processing 100 million pounds of scrap and waste annually, including an increasing amount of scrap from other Westlake businesses.

在我們的分子中，PVC 管（或 PVCO）已進入 PVC 管，它提供了比任何其他水管材料更輕、更耐用的 PVC 管，碳足跡更低。我們於 2021 年收購的 Dimex 業務是美國最大的塑料材料回收業務之一，每年處理 1 億磅廢料和廢物，其中包括來自其他 Westlake 業務的越來越多的廢料。

As part of our sustainability focus, we are continuing to introduce products into the market that include recycled and bio attributed components that satisfy consumer demands. Finally, we continue to look for opportunities to redeploy our well-capitalized balance sheet in a disciplined manner that will create long-term value for shareholders. This includes both identifying acquisition candidates with returns that can see our cost capital and returning cash to shareholders through both dividends and share repurchases. We expect more opportunities to redeploy capital to present themselves as economic conditions stabilize throughout 2023. In the meantime, we continue to benefit from the earnings power and the stability created by the investments we have made in our business and our increasing focus on specialty materials and downstream products. Thank you very much for listening to our first quarter earnings call.

作為我們可持續發展重點的一部分，我們將繼續向市場推出包含可回收和生物成分的產品，以滿足消費者的需求。最後，我們繼續尋找機會以嚴格的方式重新部署我們資本充足的資產負債表，從而為股東創造長期價值。這包括確定具有可以看到我們成本資本回報的收購候選者，並通過股息和股票回購向股東返還現金。隨著 2023 年經濟狀況穩定，我們預計將有更多重新部署資本的機會。與此同時，我們將繼續受益於我們對業務的投資以及我們對特種材料和產品的日益關注所帶來的盈利能力和穩定性。下游產品。非常感謝您收聽我們的第一季度財報電話會議。

I will now turn the call back over to Jeff.

我現在將把電話轉回給傑夫。

Thank you, Albert. Before we begin taking questions, I would like to remind listeners that our earnings presentation which provides additional clarity into our results is available on our website, and a replay of this teleconference will be available 2 hours after this call has ended. We will provide that number again at the end of the call. We will now take questions.

謝謝你，艾伯特。在我們開始回答問題之前，我想提醒聽眾，我們的收益演示可以在我們的網站上提供，該演示可以讓我們的業績更加清晰，並且本次電話會議的重播將在本次電話會議結束後 2 小時提供。我們將在通話結束時再次提供該號碼。我們現在將接受提問。

(Operator Instructions) Your first question comes from the line of Michael Sison of Wells Fargo.

（操作員說明）您的第一個問題來自富國銀行的邁克爾·西森（Michael Sison）。

Nice start to the year. Albert, I think you mentioned that 2Q tends to be seasonally better than 1Q. As you said -- as you look at demand and where integrated margins are for all your businesses, how do you think that plays out this year given things are weakening across the board?

今年開局不錯。艾伯特，我想你提到第二季度的季節性往往好於第一季度。正如您所說，當您考慮需求以及所有業務的綜合利潤率時，鑑於情況全面疲軟，您認為今年的情況如何？

Yes. We've seen inventories destocking run its course and pretty much finished that destocking process. And we believe that customers are reordering as they see the demand. And we believe that the economy has stabilized through the changes in interest rate increase, and it should improve from the bottoms we've seen in the fourth quarter of 2022.

是的。我們已經看到庫存去庫存已完成，並且幾乎完成了去庫存過程。我們相信客戶會在看到需求後重新訂購。我們認為，通過加息的變化，經濟已經企穩，並且應該會從 2022 年第四季度的底部有所改善。

But having said that, the Fed just raised interest rates, and they could have repercussions in the economy going forward. But we believe that the U.S. economy is still quite long, domestic demand is quite strong. We've seen that in our -- both in the PEM segment, polyethylene, PVC as well as in our HIP Building Materials business. So we are cautiously optimistic that we will see some improvements. It doesn't mean that we'll go back to 2022 or 2021 high levels before the interest rates start increasing.

但話雖如此，美聯儲剛剛加息，可能會對未來的經濟產生影響。但我們認為美國經濟仍相當長，內需相當強勁。我們已經在 PEM 領域、聚乙烯、PVC 以及 HIP 建築材料業務中看到了這一點。因此，我們對會看到一些改進持謹慎樂觀的態度。這並不意味著我們會在利率開始上升之前回到 2022 年或 2021 年的高水平。

Got it. And then for PVC and polyethylene, how is China recovering? And is the export market starting to improve here could really shore up domestic operating rates?

知道了。那麼對於聚氯乙烯和聚乙烯來說，中國的複蘇情況如何？出口市場開始改善真的能提振國內開工率嗎？

Yes. I think China's economy is improving slowly, slower than people expected after the opening from pandemic and after the Chinese New Year celebrations. But we see that the economy is still strong. People are going out about traveling and spending and the stimulus from the government as well, will take some time. We believe that China's economy should be improving.

是的。我認為中國經濟正在緩慢改善，比人們在疫情爆發和農曆新年慶祝活動之後的預期要慢。但我們看到經濟仍然強勁。人們外出旅遊和消費，政府的刺激措施也需要一些時間。我們認為中國經濟應該會好轉。

Your next question comes from the line of Kevin McCarthy of Vertical Research Partners.

您的下一個問題來自 Vertical Research Partners 的 Kevin McCarthy。

Albert, in your press release, there is a comment that you saw increasing demand for epoxy resins which surprised me a little bit. Can you elaborate on what you're seeing in the epoxy market with regard to demand and operating rates? And looking ahead, are you seeing any increased stability in the pricing function there?

艾伯特，在您的新聞稿中，有一條評論說您看到對環氧樹脂的需求不斷增加，這讓我有點驚訝。您能否詳細說明一下您對環氧樹脂市場的需求和開工率的看法？展望未來，您是否看到定價功能的穩定性有所提高？

Sure, Kevin. Yes, we see epoxy demand improving, primarily in North America, still quite weak in Europe with a high cost position in Europe and also in Asia, it's relatively weak. But we are seeing signs of improvement and the U.S. economy is still growing. We need more windmill blades and coatings as well as structural products. So we believe that the epoxy business should have a good position going forward, but not as, of course, robust as in 2021, 2022. But we believe the demand is there. And I think when the economy recovers, the increased demand in epoxy, especially in the U.S. with a lower cost position as well.

當然，凱文。是的，我們看到環氧樹脂需求有所改善，主要是在北美，歐洲仍然相當疲軟，歐洲成本較高，亞洲也相對疲軟。但我們看到了改善的跡象，美國經濟仍在增長。我們需要更多的風車葉片和塗料以及結構產品。因此，我們認為環氧樹脂業務未來應該有良好的發展前景，但當然不會像 2021 年、2022 年那樣強勁。但我們相信需求是存在的。我認為當經濟復甦時，環氧樹脂的需求會增加，特別是在成本較低的美國。

Okay. And then secondly, your HIP segment margins hung in quite well given the volume decline as you sort of prove out that business through what seems to be a tougher external environment, demand-wise, Albert, do you see opportunities to add to the construction-related portfolio during the current cyclical downturn? It looks like your net debt has declined about $1.6 billion year-over-year, providing you with more financial flexibility. So curious as to your appetite to add via acquisitions to that business?

好的。其次，考慮到銷量下降，你的 HIP 部門利潤率保持得很好，因為你通過似乎更嚴峻的外部環境證明了該業務，從需求角度來看，阿爾伯特，你是否看到了增加建設的機會-當前週期性低迷時期的相關投資組合？您的淨債務似乎同比減少了約 16 億美元，為您提供了更大的財務靈活性。您對通過收購增加該業務的興趣感到好奇嗎？

Kevin, it's Steve. And you're right, we've seen, I think, good performance in the first quarter to be able to maintain very strong margins in that business. And I think it illustrates the strength of the brand and the mix. And as we think about the mix of products that we have and the branding, there are opportunities to add to the portfolio in that building products business.

凱文，我是史蒂夫。你是對的，我認為我們在第一季度看到了良好的業績，能夠在該業務中保持非常強勁的利潤率。我認為這體現了品牌和組合的實力。當我們考慮我們擁有的產品組合和品牌時，有機會添加到建築產品業務的產品組合中。

And we continue to be quite interested to look to fill opportunities where we see demand and can satisfy our customers with those branded products and add to that portfolio. So we'll continue to look for opportunities to build out that portfolio where it makes sense. So we are constantly looking and as you would guess and actively in dialogue with folks just finding the right opportunity and the right price.

我們仍然非常有興趣尋找填補我們看到需求的機會，並且可以通過這些品牌產品滿足我們的客戶並添加到該產品組合中。因此，我們將繼續尋找機會在有意義的地方構建該產品組合。因此，正如您所猜測的那樣，我們不斷尋找並積極與人們對話，以找到合適的機會和合適的價格。

And our next question comes from the line of Josh Spector of UBS.

我們的下一個問題來自瑞銀集團的喬什·斯佩克特。

I was just wondering where you would say your cost base is now. So with what you reported in the quarter, does that reflect kind of the lower energy feedstock environment or your LIFO adjustments you call out. Is that the right way to think about that? Or is there another tranche that kind of flows through inventory that could help you versus where you are today?

我只是想知道您現在的成本基礎在哪裡。因此，根據您在本季度報告的情況，這是否反映了較低的能源原料環境或您提出的後進先出調整。這是正確的思考方式嗎？或者是否還有另一部分通過庫存流動可以幫助您改善目前的狀況？

Yes. Certainly, as a FIFO reporter, you would imagine that there is still some of that lower cost that will flow through as a result, which is why I always like providing you some sense of what we would see if you're using LIFO versus our FIFO. As you look forward into the forward prices for gas or for ethane, you can see that compared to 2022, '23 numbers for gas or for ethane will be significantly lower as we see in the forward curve. So we -- I think we're very well positioned with a Gulf Coast North American footprint for a large portion of our portfolio and that strong position will continue to play well if the forward curve plays out as it is forecasted to.

是的。當然，作為一名 FIFO 報告者，您可能會想像，結果仍然會有一些較低的成本，這就是為什麼我總是喜歡向您提供一些關於如果您使用 LIFO 與我們的先進先出。當您展望天然氣或乙烷的遠期價格時，您可以看到與 2022 年相比，'23 天然氣或乙烷的數字將顯著降低，正如我們在遠期曲線中看到的那樣。因此，我認為我們處於非常有利的位置，我們的投資組合的很大一部分都在北美墨西哥灣沿岸，如果遠期曲線如預期那樣發揮作用，那麼這種強勢地位將繼續發揮良好作用。

Jo, I just want to add some more information numbers. As Steve said, the average gas price in 2022 was $6.55 per MMBtu and the current and forecast estimate for 2023 is $2.95 per MMBtu, less than half of that. And as you know, natural gas also impact the price of ethane, which is a fixed now for ethylene and also impact our power price. We buy based on the power and natural gas price -- natural gas is a large fuel input for power. So all that has a very positive impact on our cost position.

喬，我只是想添加一些更多的信息數字。正如 Steve 所說，2022 年的平均天然氣價格為每 MMBtu 6.55 美元，而 2023 年的當前和預測估計為每 MMBtu 2.95 美元，不到一半。如您所知，天然氣也會影響乙烷的價格（乙烯現在是固定的），也會影響我們的電價。我們根據電力和天然氣價格購買——天然氣是電力的大量燃料輸入。因此，所有這些都對我們的成本狀況產生了非常積極的影響。

So to give you some sense of the earnings potential here when you think of the sensitivities we have just to natural gas, $1 in MMBtu on an annualized basis across the entire portfolio of Westlake is $125 million improvement in EBITDA. And so given the fact that Albert was looking at $6.55 for 2022 and the forward curve of $2.95, you've got over $3 of forward value that could play through. So that sensitivity I gave you of $1 to $125 million of EBITDA is a huge potential opportunity for the company to see rent strengthened earnings this year.

因此，當您考慮我們對天然氣的敏感性時，為了讓您對這裡的盈利潛力有所了解，Westlake 整個投資組合的年化 1 美元 MMBtu 相當於 EBITDA 改善 1.25 億美元。因此，考慮到 Albert 預計 2022 年的價格為 6.55 美元，遠期曲線為 2.95 美元，因此您可以獲得超過 3 美元的遠期價值。因此，我給你的 1 到 1.25 億美元的 EBITDA 敏感性對於公司來說是一個巨大的潛在機會，可以看到今年租金增強的收益。

I appreciate all that. And just quickly on the PVC sales mix. I mean you noted it's improved in terms of shifting back to the domestic market. Would you say it's normal in terms of your mix now? Or are you still a little bit more skewed to export than you typically are?

我很感激這一切。并快速介紹 PVC 銷售組合。我的意思是你注意到在轉向國內市場方面有所改善。你認為現在的組合是正常的嗎？或者您是否仍然比平時更傾向於出口？

Yes, it's more normal. At the end of last year, the fourth quarter of 2022, because of lack of demand, people are destocking the inventory. We had to export a lot overseas and those prices are being lower. And as domestic demand recovered as well as the start of building season is really starting from March. So we are seeing the second quarter the demand has increased -- improved a lot more.

是的，這更正常。去年年底，2022年第四季度，由於需求不足，人們正在去庫存。我們必須向海外大量出口，而這些價格正在降低。而隨著國內需求的複蘇以及建築旺季的真正開始，從3月份開始。因此，我們看到第二季度的需求有所增加——改善幅度更大。

Our next question comes from the line of John Roberts of Credit Suisse.

我們的下一個問題來自瑞士信貸銀行的約翰·羅伯茨。

You noted the increased exports of polyethylene and vinyls. Could you talk about some of the geographic shift that's going on in epoxy. So we've got China epoxies moving into Europe. Are you shifting any of your geographic footprint in our epoxy sales as well?

您注意到聚乙烯和乙烯基塑料的出口增加。您能談談環氧樹脂領域正在發生的一些地理變化嗎？因此，我們已經將中國環氧樹脂轉移到歐洲。您是否也改變了我們環氧樹脂銷售中的地理足跡？

Yes. We are reacting to all the dynamics in the very competitive global marketplace. And as I said earlier, the China with its economy has been slowing in the past years or quarters, they exported the epoxy and as well as PVC to places like India and Europe. But we're seeing that being slowing down the Chinese economy is improving, but things could change. So -- but we are very cautious and colleagues and all the activities going on.

是的。我們正在對競爭激烈的全球市場中的所有動態做出反應。正如我之前所說，中國的經濟在過去幾年或幾個季度一直在放緩，他們將環氧樹脂和聚氯乙烯出口到印度和歐洲等地。但我們看到中國經濟放緩正在改善，但情況可能會發生變化。所以——但我們和同事以及正在進行的所有活動都非常謹慎。

And then secondly, on the Westlake partnership, are you still just waiting for a better value to do more drop downs? And does it make sense at some point to drop the low-take cracker interest into the MLPs?

其次，關於西湖合作夥伴關係，您是否還在等待更好的價值來進行更多的下拉？在某些時候將低收入破解者的興趣轉移到 MLP 是否有意義？

Yes. So when we think of the opportunity there to put the ethylene -- our ownership of the ethylene unit for low end of the unit, it's certainly possible. The issue is, as you noted, is really having the right valuations and the capital access. So there is an opportunity to do that if we see the right valuations and the right access to capital.

是的。因此，當我們想到將乙烯（我們對乙烯裝置的所有權）投入低端裝置的機會時，這當然是可能的。正如您所指出的，問題在於真正具有正確的估值和資本准入。因此，如果我們看到正確的估值和正確的資本獲取渠道，就有機會做到這一點。

Your next question comes from the line of Duffy Fischer of Goldman Sachs.

你的下一個問題來自高盛的達菲·費舍爾。

When you look at the vinyl chain chlorine, EDC, VCM into PVC you see significant shifts in the relative contribution between the steps as we go forward this year?

當您觀察 PVC 中的乙烯基鏈氯、EDC、VCM 時，您會發現隨著我們今年的進展，這些步驟之間的相對貢獻發生了顯著變化？

Yes. Well, we looked at the chain economics, and you're right, they do move up and down the chain. Right now, the tolling value is very high. So the chain value is more on the chlor-alkali business lot downstream PVC, but that could change also.

是的。好吧，我們研究了鏈條經濟學，你是對的，它們確實在鏈條上上下移動。目前，通行費非常高。因此，環比價值更多地集中在PVC下游的氯鹼業務上，但這也可能發生變化。

Fair enough. And then one of your large competitors in epoxy has talked about doing some pretty significant restructuring of their assets, you've had years for about a year. As you look at it, do you have the right footprint, do you think an epoxy -- or do you think you need to do some significant restructuring of your asset base as well?

很公平。然後，您在環氧樹脂領域的一個大型競爭對手談到了對其資產進行一些相當重大的重組，您已經有大約一年的時間了。當您審視它時，您是否擁有正確的足跡，您是否認為環氧樹脂 - 或者您是否認為您還需要對您的資產基礎進行一些重大重組？

Yes, certainly, we are new to the epoxy business and have had ownership for a year. We find a lot opportunity to improve. And as we go forward, we'll try to improve our positions.

是的，當然，我們是環氧樹脂業務的新手，並且擁有一年的所有權。我們發現很多改進的機會。隨著我們的前進，我們將努力改善我們的地位。

Our next question comes from the line of Steve Byrne of Bank of America.

我們的下一個問題來自美國銀行的史蒂夫·伯恩。

This is actually Matt on for Steve. So just kind of looking at -- and we spoke a little bit to this, but Chinese coal prices have been softening up here a bit. And I know there was some expectation that perhaps China could rationalize some capacity of PVC because margins are pretty weak. But if we think about the competitive position out of Asia right now with maybe a softer feedstock market, you expect that maybe just goes to some margin relief for those producers and prices will stay kind of where we are? Or do you see this as deflationary for global prices? Do you think the demand can kind of soak that up?

這實際上是馬特為史蒂夫做的。我們對此進行了一些討論，但中國的煤炭價格已經有所走軟。我知道有人預計中國可能會合理化部分聚氯乙烯產能，因為利潤率相當低。但如果我們考慮一下亞洲目前的競爭地位，原料市場可能較為疲軟，您預計這可能會減輕這些生產商的利潤，而價格將保持在我們目前的水平？或者您認為這對全球價格來說是通貨緊縮？您認為需求可以吸收這一點嗎？

Yes, that's great. That's a very good question. I think China, the double control on the carbon emissions environmental impact, dollar or GDP they generate is still much concerned by the government and implementing double control. And with the PVC, 80% of Chinese PVC are produced from the coal-based carbide process, and the nonintegrated producers who are not integrated coal mines with low PVC price cannot really compete and losing money. So there could be quite a chunk of Chinese non-integrated producers being getting out of business. But it doesn't mean that there's also still some expansions announced by the integrated producers. So we'll see how those dynamics play out. But it should improve the global economy when Chinese coal-based PVC producers are shut down or phased out.

是的，那太好了。這是一個非常好的問題。我認為中國，對碳排放對環境的影響、其產生的美元或GDP的雙重控制仍然受到政府的高度關注並實施雙重控制。而PVC方面，中國80%的PVC是通過煤基電石法生產的，非綜合煤礦的非綜合生產商，PVC價格低，無法真正競爭並虧損。因此，可能會有相當多的中國非綜合生產商破產。但這並不意味著綜合生產商仍然宣布了一些擴張。所以我們將看看這些動態如何發揮作用。但當中國煤基聚氯乙烯生產商被關閉或逐步淘汰時，全球經濟應該會有所改善。

Okay. And if I look at the U.S. vinyls like vinyl derivatives, PVC and just merchant chlorine markets, I mean, is there room for these markets to absorb further chlorine prices should caustic weaken and we see the chlorine side of the ECU push further pricing?

好的。如果我看看美國乙烯基，如乙烯基衍生物、PVC 和商業氯市場，我的意思是，如果腐蝕劑走軟，這些市場是否有空間吸收進一步的氯價格，並且我們看到 ECU 的氯方面推動進一步定價？

That's a good question. I think today, U.S. export is around 30-odd percent of its PVC already. And I think the caustic wise will export around 20-odd percent. So new capacity added on, we're also accessing the export market, which is very volatile. It can be good. It can be bad.

這是個好問題。我認為今天美國的 PVC 出口量已經占到了 30% 左右。我認為苛性鹼的出口量將達到 20% 左右。隨著新產能的增加，我們也進入了非常不穩定的出口市場。這可能很好。這可能很糟糕。

But from a price perspective and the implied margins that we're dealing with in PVC, is -- do you see a world where you can kind of push further chlorine prices into this market? Or do you think it's going to be by a pushback?

但從價格角度和我們在 PVC 中處理的隱含利潤來看，您是否認為可以進一步推動氯價格進入該市場？或者你認為這會受到阻力？

Well, if you're integrated selling the margin to be shared, but if you're not integrated, then depending where the chain you have. And the biggest use of chlorine in the U.S. is still PVC. So if you have chlor-alkali but no PVC, you're not able to access that market. And vice versa, if you're a PVC and no chlor-alkali, you can't get a margin. So -- and I think Westlake want the best integrated producer in the U.S. and all in the world.

好吧，如果你是整合銷售，那麼利潤將被分享，但如果你沒有整合，那麼取決於你擁有的連鎖店在哪裡。美國氯的最大用途仍然是聚氯乙烯。因此，如果您有氯鹼但沒有 PVC，您就無法進入該市場。反之亦然，如果你是PVC而不是氯鹼，你就得不到利潤。因此，我認為 Westlake 想要成為美國乃至世界上最好的綜合生產商。

Our next question comes from the line of Matthew Blair of TPH.

我們的下一個問題來自 TPH 的馬修·布萊爾 (Matthew Blair)。

The HIP volume improvement of up 9.6% quarter-over-quarter appears quite strong, especially in light of just the weak construction markets. Are you able to break this out into one, what is just the normal seasonal move for HIP in Q1? Two, what was the impact of less destocking? And then three, what was the impact of just underlying demand improvement, if any, in the segment?

HIP 銷量環比增長 9.6% 似乎相當強勁，尤其是考慮到建築市場疲軟。您能否將其分解為一個問題：第一季度 HIP 的正常季節性變化是什麼？二、去庫存減少有何影響？第三，潛在需求改善（如果有的話）對該領域的影響是什麼？

Yes. Yes, I think it's probably a large part is the impact of reduction of destocking because of the sharp interest rate increase last year and the mortgage rate -- high mortgage rates people really reduced the home purchases. And I think many of the builders are very cautious and distorted and use of all their products in the inventory. So -- but even then, still compared with first quarter 2022, that's kind of maybe a high peak of infrastructure business is still a 21% reduction in volume. So it's quite a dramatic reduction despite that compared with fourth quarter last year, it was an improvement.

是的。是的，我想很大一部分可能是去庫存減少的影響，因為去年加息和房貸利率的大幅上漲——高房貸利率確實讓人們減少了購房。我認為許多建築商都非常謹慎和扭曲，並使用庫存中的所有產品。因此，但即便如此，與 2022 年第一季度相比，基礎設施業務的高峰期仍然是數量減少了 21%。因此，儘管與去年第四季度相比，這是一個相當大的下降，但這是一個進步。

And second quarter usually is the strongest quarter in construction, as we said earlier. And hopefully, as we read that some of the homebuilders, they had incentives and everything else to increase the demand. And we read that recently, they are reducing some incentives because the demand is coming back, the 10-year average treasury rate is coming down from the what 4-odd percent, it's down to 3.4%. So it is a benefit from mortgage interest rates. So we are seeing some of improvement, but it's still a bit early. We don't know how the economy will pan out second half of this year. But I think most people are reading that housing will be poor this year compared to last year and will improve 2024 and 2025 sequentially.

正如我們之前所說，第二季度通常是建築業最強勁的季度。希望當我們讀到一些房屋建築商時，他們有動力和其他一切來增加需求。我們最近讀到，他們正在減少一些激勵措施，因為需求正在回升，10 年期平均國債利率從 4% 左右下降到 3.4%。所以這是抵押貸款利率的一個好處。所以我們看到了一些改進，但還為時過早。我們不知道今年下半年經濟會如何發展。但我認為大多數人都讀到，與去年相比，今年的住房狀況將很差，但 2024 年和 2025 年將依次改善。

Great. And then it looks like Southeast Asia spot caustic prices are down about 20% versus Q1 levels. Is that mostly a function of weaker industrial demand? And how likely is it that those weaker Asia prices will flow into the U.S. market?

偉大的。東南亞現貨苛性鹼價格似乎比第一季度水平下降了約 20%。這主要是工業需求疲軟的結果嗎？那些疲軟的亞洲價格流入美國市場的可能性有多大？

Yes. As Asia was exporting PVC they have more access caustic. And coupled with a weak economy, generally speaking, in Asia, caustic price came down. We believe that export or Asia caustic prices bottomed out, and we're seeing signs of improvement. And also the economy in Asia are improving gradually, especially China, that will help. So we think that the demand will absorb some of those excess capacity.

是的。由於亞洲正在出口聚氯乙烯，因此他們有更多的途徑獲得苛性鹼。加之經濟疲軟，亞洲地區燒鹼價格普遍下跌。我們認為出口或亞洲苛性鹼價格已經觸底，並且我們看到了改善的跡象。而且亞洲經濟正在逐漸改善，尤其是中國，這將有所幫助。因此，我們認為需求將吸收部分過剩產能。

And our next question comes from the line of Arun Viswanathan of RBC Capital Markets.

我們的下一個問題來自加拿大皇家銀行資本市場 (RBC Capital Markets) 的阿倫·維斯瓦納坦 (Arun Viswanathan)。

Congrats on the quarter. So I guess, first question is, you guys commented on some improving trends in PVC and epoxy. Could you just elaborate on those -- and I guess, is that -- do you expect that sales to continue and maybe accelerate with a tax reopening?

恭喜本季度。所以我想，第一個問題是，你們評論了 PVC 和環氧樹脂的一些改進趨勢。您能否詳細說明一下這些問題——我想是這樣——您預計銷售會繼續下去，並且可能會隨著稅收重新開放而加速嗎？

Well, as I said, PVC demand should be improving from fourth quarter level and into the first quarter and second quarter. But I think some of the consultants chemical market analytics saying that they foresee the rest of the year pretty much flat in prices, which shows that this is domestic U.S. price. And they are looking at somewhat improving prices for next year. This is forward-looking. So I think people believe that we've seen the bottom of fourth quarter last year and things will improve gradually as demand improves.

嗯，正如我所說，PVC 需求應該會從第四季度的水平開始改善，進入第一季度和第二季度。但我認為一些化學品市場分析顧問表示，他們預計今年剩餘時間價格將基本持平，這表明這是美國國內價格。他們正在考慮明年的價格有所改善。這是具有前瞻性的。因此，我認為人們相信我們已經看到去年第四季度的底部，隨著需求的改善，情況將會逐漸改善。

Great. And then maybe you can just update on your thoughts on caustic as you move through the year. You still expect declines? Is there really any stabilization there?

偉大的。然後也許你可以在這一年中更新你對腐蝕性的想法。您仍然預計會下跌嗎？那裡真的有穩定嗎？

Yes. Again, caustic prices probably reached very high levels in the first -- end of last year, early this year. And the forecast by consultants are saying the price will decline gradually throughout the year and stabilize by the end of the year next year. Whilst it depends again on the U.S. industrial economy because caustic is used very broadly in many areas, and pulp and paper right now is a bit weak, reflecting the economy. But what else things will improve and alumina -- aluminum is -- demand is increasing. The infrastructure construction is increasing and also mining, lithium mining, other kind of mining is increasing. So demand in caustic could improve. We don't know. But as we said earlier in our call, that caustic and chlorine prices are very high levels, and we are benefiting from those with lower power costs and natural gas prices. So we're benefiting from the margins.

是的。同樣，苛性鹼價格可能在去年年底、今年年初達到非常高的水平。而顧問預測，全年價格將逐步下降，明年年底將趨於穩定。雖然這再次取決於美國的工業經濟，因為苛性鹼在許多領域的使用非常廣泛，而紙漿和造紙目前有點疲軟，反映了經濟狀況。但還有什麼事情會改善，氧化鋁——鋁——的需求正在增加。基礎設施建設不斷增加，採礦業、鋰礦開采和其他類型的採礦業也在增加。因此，苛性鹼的需求可能會改善。我們不知道。但正如我們早些時候在電話會議中所說，苛性鹼和氯的價格非常高，我們正受益於較低的電力成本和天然氣價格。所以我們從利潤中受益。

Our next question comes from the line of David Begleiter of Deutsche Bank.

我們的下一個問題來自德意志銀行的 David Begleiter。

Albert, we've seen rent oil price drop from the high 80s to the low 70s in the last 3 weeks. And I think about that drop and its impact on both the U.S. cost vantage and your own ethylene chain profitability.

艾伯特，過去 3 週我們看到租金油價從 80 多美元跌至 70 多美元。我想到了這種下降及其對美國成本優勢和您自己的乙烯鏈盈利能力的影響。

Well, definitely, it would have some impact. As you know, most of the world, probably 2/3 or so using naphtha as destock for the ethylene cracker. So as oil price dropped, naphtha price drop, it improves the economics. But especially in Asia, the naphtha-based ethylene, polyethylene producers have been losing money selling polyethylene based on the naphtha price. So this should help them improve the economics. But we are still very competitive with ethane cracking, our cost is really -- definitely it is the lowest among all the feedstocks and still a wide margin apart from naphtha cracking.

嗯，當然，它會產生一些影響。如您所知，世界上大部分地區（可能有 2/3 左右）使用石腦油作為乙烯裂解裝置的去庫存。因此，隨著石油價格下降，石腦油價格下降，它改善了經濟效益。但特別是在亞洲，基於石腦油的乙烯、聚乙烯生產商因石腦油價格而銷售聚乙烯一直在虧損。所以這應該有助於他們改善經濟狀況。但我們在乙烷裂解方面仍然非常有競爭力，我們的成本確實是所有原料中最低的，並且與石腦油裂解相比仍然有很大的利潤。

Very good. And just on the U.S. polyethylene prices, I don't believe the April contract has failed yet. How do you think about Q2 U.S. polyethylene prices has trended in the quarter?

非常好。僅就美國聚乙烯價格而言，我認為四月合約尚未失效。您如何看待第二季度美國聚乙烯價格的走勢？

Yes. I think the polyethylene price for April has been flat. It came on settled and flat. And I think, again, some of the consultants are looking pretty much flat price to the rest of the year. The industry has announced $0.05 a pound price increase actually for April and now push it to May. So the industry believes that the demand is improving. The price has been low compared with last year, they dropped sharply since the second half of last year that we deserve some improvements in margins. But time will tell whether the $0.05 can be -- or part of it can be realized in May or second half of -- second quarter of this year.

是的。我認為四月份聚乙烯價格持平。它變得穩定而平坦。我再次認為，一些顧問認為今年剩餘時間的價格幾乎持平。該行業已宣布 4 月份實際價格每磅上漲 0.05 美元，現在將其推遲到 5 月份。因此業內認為需求正在改善。價格與去年相比一直很低，自去年下半年以來價格大幅下降，我們值得在利潤率方面有所改善。但時間會證明這 0.05 美元是否可以——或者其中的一部分——可以在今年第二季度的 5 月或下半年實現。

Our next question comes from the line of Aleksey Yefremov of KeyBanc.

我們的下一個問題來自 KeyBanc 的 Aleksey Yefremov。

Albert, can you talk about your utilization in the U.S. PVC assets and chlor-alkali assets. If you can provide any comments about your levels and also relative to industry averages?

Albert，您能談談您在美國PVC資產和氯鹼資產的利用情況嗎？您能否對您的水平以及相對於行業平均水平提供任何評論？

Yes, there's some turnaround going on and some planned outages. I think the chlorine running out 80-odd percent and PVC is in the mid-80s operating rates and also reflecting the supply-demand dynamics globally.

是的，正在進行一些周轉和一些計劃中的停電。我認為氯氣已經耗盡了 80% 左右，PVC 的開工率處於 80 年代中期，也反映了全球的供需動態。

Albert, and staying with PVC. How do you see domestic market if we try to break it down terms of demand between new housing, R&R and infrastructure? If you do know the kind of the rough percentages between those 3 buckets?

艾伯特，繼續使用 PVC。如果我們嘗試將新住房、R&R 和基礎設施之間的需求進行分解，您如何看待國內市場？您是否知道這 3 個桶之間的粗略百分比是多少？

The infrastructure is the smallest component and housing, we think the largest component as we show in our HIP separations, we show the sales of our Housing and Infrastructure segment -- part of the segment. And within housing, probably 2/3 of the sales are related to repair and modeling in general, and new homes is 1/3. There are lots and lots. I don't know how many homes close to 100 million homes out there. And we're talking about 1.5 million, 1.4 million new home construction.

基礎設施是最小的組成部分，而住房是最大的組成部分，正如我們在 HIP 分離中所展示的那樣，我們展示了住房和基礎設施部門的銷售——該部門的一部分。在住房領域，大概 2/3 的銷售額與一般的維修和建模有關，而新房則佔 1/3。有很多很多。我不知道還有多少個家庭，接近一億個家庭。我們正在談論 150 萬、140 萬套新房建設。

And depending on the repair and modeling, what they use, whether it's siding, PVC window, roofing, so on and so forth. So they use a fair amount of PVC in repair modeling than in new construction. But new construction is still a big part of it. And for Westlake, we're about 50-50 with our capacities of -- in our HIP business, our sales split about 50-50, 50% goes into new construction homes and 50% go to repair and modeling.

取決於修復和​​建模，他們使用什麼，是否是壁板、PVC 窗戶、屋頂等等。因此，他們在修復模型中使用的 PVC 量比在新建建築中使用的量要多。但新建工程仍佔其中很大一部分。對於 Westlake，我們的產能約為 50-50——在我們的 HIP 業務中，我們的銷售比例約為 50-50，50% 用於新建房屋，50% 用於維修和建模。

And you could see that in the first quarter, repair and remodeling was fairly resilient even though we saw some continued concern in the new start levels, but you could see that repair and remodeling in the first quarter was resilient. There are forecasters that would continue to suggest that repair and remodeling will continue to grow this year, probably at lower rates than last year, but nevertheless, remain resilient to '23.

你可以看到，在第一季度，維修和改造相當有彈性，儘管我們看到新的開工水平仍然存在一些擔憂，但你可以看到第一季度的維修和改造是有彈性的。有預測人士繼續表示，今年維修和改建將繼續增長，增速可能低於去年，但儘管如此，到 23 世紀仍將保持彈性。

Our next question comes from the line of Hassan Ahmed of Alembic Global Advisors.

我們的下一個問題來自 Alembic Global Advisors 的 Hassan Ahmed。

A question around polyethylene. You talked a bit about the pricing dynamics. Obviously, there's a fair bit of capacity coming online this year. But as I sort of sit there and look through the different grades of polyethylene, you guys are fairly sort of exposed to the LDPE side of it. And it seems that the capacity growth at -- on the LDPE side, is far more tepid than the other grades. So should we sort of expect to see divergence sort of pricing trends between the different grades?

關於聚乙烯的問題。您談到了定價動態。顯然，今年有相當多的產能上線。但當我坐在那裡仔細觀察不同等級的聚乙烯時，你們相當接觸到了 LDPE 的一面。 LDPE 方面的產能增長似乎遠比其他級別溫和。那麼我們是否應該期望看到不同等級之間的定價趨勢存在差異？

Well, this is Albert. Good question. We always felt that LDPE should be separately priced and something is low and high density. They're all different. They all polyethylene, but a different -- serve different segments, but somehow our industry lumped altogether. And as you said, all the new capacity and those haven't started yet, but have mechanic completion, but having difficulty starting up. Those are primarily high density and linear load density and not LDPE. I think the LDPE has already started. But nevertheless, it has impact all the industry, they lumped together and the pricing ups and downs are linked together.

嗯，這是艾伯特。好問題。我們一直覺得LDPE應該分開定價，有低密度的，有高密度的。他們都是不同的。它們都是聚乙烯，但不同——服務於不同的細分市場，但不知何故，我們的行業混在一起。正如你所說，所有新產能和那些尚未啟動，但已完成機械工作，但啟動困難。這些主要是高密度和線性負載密度，而不是 LDPE。我認為 LDPE 已經開始了。但儘管如此，它還是對整個行業產生了影響，它們集中在一起，價格的漲跌是聯繫在一起的。

Understood. Understood.

明白了。明白了。

One point I want to make to that the margins, even the price were up or down together, the margin for LDPE is far better than the margins for the baking polyethylene -- linear load density or high density. So turning better margins. Yes. Okay.

我想指出的一點是，即使價格一起上漲或下跌，LDPE 的利潤率也遠遠好於烘焙聚乙烯的利潤率——線性負載密度或高密度。從而獲得更好的利潤。是的。好的。

Fair enough. So now on the epoxy side of it Albert, you obviously -- the commentary sounded incrementally positive. So is it fair to assume that potentially Q4 and Q1 were the trough and sort of things start cycling up from there. And if that is the case, this inflection, will this be primarily sort of demand driven with sort of China picking up and the like? Or will it be partly demand driven and partly supply driven as well, where sort of -- in that sort of positive commentary you're being in maybe some capacity rationalization in the marketplace. Maybe less disruptive pricing. You talked obviously about China exporting less now. So I'm just trying to figure out supply and demand wise, what you guys have seen there.

很公平。所以現在在環氧樹脂方面，阿爾伯特，你顯然 - 評論聽起來越來越積極。因此，可以公平地假設第四季度和第一季度可能是低谷，並且一些事情從那裡開始循環上升。如果是這樣的話，這種轉變主要是由中國經濟復甦等需求驅動的嗎？或者它會部分由需求驅動，部分由供應驅動，在這種積極的評論中，你可能處於市場上的某種產能合理化之中。也許更少的破壞性定價。您顯然談到了中國現在出口減少。所以我只是想弄清楚你們在那裡看到的供需情況。

Yes, that's a very good question. I think for PVC, we think you are right that Chinese demand increasing, especially real estate, which is a big component of the economy and the government tried to stimulate that part as well, that dimension increase of less export and pricing should improve and so as caustic. On the epoxy side, little bit different. It's not that a big business and the Chinese are building.

是的，這是一個非常好的問題。我認為對於PVC，我們認為中國的需求增加是正確的，尤其是房地產，這是經濟的一個重要組成部分，政府也試圖刺激這一部分，出口減少和定價的規模增長應該會改善，所以作為腐蝕性。在環氧樹脂方面，略有不同。這並不是一個大企業和中國人正在建設的。

Looking for the windmills and windmills are just getting back in China of new construction. Certainly, everybody needs a renewable energy and lower cost. So it takes time for that to come into this place. Meanwhile, as one of the earlier questions that they have been exporting the amount overseas. But as the year progresses in next year, I think next few years, definitely, the demand for epoxy globally will increase improve. But this year is still a -- maybe it's a bottom of the cycle year.

尋找風車和風車都是剛剛回到中國的新建築。當然，每個人都需要可再生能源和更低的成本。所以它需要時間才能進入這個地方。與此同時，作為早期的問題之一，他們向海外出口的金額。但隨著明年的進展，我認為未來幾年，全球對環氧樹脂的需求肯定會增加和改善。但今年仍然是——也許是周期的底部一年。

(Operator Instructions) Our next question comes from the line of Angel Castillo of Morgan Stanley.

（操作員指令）我們的下一個問題來自摩根士丹利的安吉爾·卡斯蒂略（Angel Castillo）。

This is Turner Hinrichs on for Angel. I was wondering if you could give us a little more color on your epoxy business results, specifically how they compare to 1Q '22 of last year and 4Q '22 of last year as well. And as part of that, would you say your epoxy business is gaining share in the market? Or how is Westlake's position evolving in light of the ongoing imports from Asia and strategic moves by one of your peers?

我是安吉爾的特納·辛里奇。我想知道您是否可以向我們介紹一下您的環氧樹脂業務業績，特別是與去年 22 年 1 季度和 22 年 4 季度相比如何。作為其中的一部分，您是否認為您的環氧樹脂業務正在擴大市場份額？或者，鑑於來自亞洲的持續進口以及您的同行之一的戰略舉措，Westlake 的地位有何變化？

So good question. So the market was meaningfully stronger in the first quarter of 2022. And so you certainly have seen a change in market dynamic in terms of demand first quarter of 2022. So I'd say that with the energy power circumstance that we have, let's say, in Europe, European epoxy is in a much better position to be able to compete. But you're right, there is still imports of Asian epoxy into the European market, though as the Asian markets begin to rebound, less so in terms of the volume of epoxy resins into that market.

好問題。因此，2022 年第一季度市場明顯強勁。因此，您肯定已經看到 2022 年第一季度需求方面的市場動態發生了變化。所以我想說，根據我們現有的能源電力情況，可以說在歐洲，歐洲環氧樹脂處於更有利的競爭地位。但你是對的，歐洲市場仍然有亞洲環氧樹脂的進口，儘管隨著亞洲市場開始反彈，進入該市場的環氧樹脂數量有所減少。

When you think of the domestic market for our epoxy resin, as Albert noted earlier, it's a stronger position that we see there in terms of overall market demand. And so I would say that the troughs that we saw in fourth quarter as everybody was destocking across all product chains, we certainly saw that really come to an end at the end of the fourth quarter.

當你想到我們的環氧樹脂的國內市場時，正如阿爾伯特之前指出的那樣，就整體市場需求而言，我們看到那裡的地位更為強勁。因此，我想說，我們在第四季度看到的低谷，因為每個人都在所有產品鏈上去庫存，我們當然看到這種情況在第四季度末真正結束。

And so I would say that we see some recovery as we get into '23 with '24 and beyond being stronger markets as we see greater demand for wind energy and windmill contracts being led in '22, '23 and '24 and beyond. And those will take time before those windmills are constructed and the demand really gets much stronger. So I'd say '23 is one of those years we see a strengthening of the market but not fully backed by any means back to the levels that we saw in '21 and first quarter of '22.

因此，我想說，隨著進入“23”、“24”及以後的市場走強，我們會看到一些復甦，因為我們看到“22”、“23”和“24”及以後對風能和風車合同的需求更大。風車建成之前還需要一段時間，而且需求確實會變得更加強勁。因此，我想說，23 年是我們看到市場走強的一年，但無論如何都沒有完全回到我們在 21 年和 22 年第一季度看到的水平。

That's great color. Another one, could we get a little more color on the export mix picture for PVC and PE, respectively? And can you give any comments on your domestic and export sales mix and mix shifts relative to levels seen in the industry?

那顏色真棒。另外，我們能否對 PVC 和 PE 的出口混合圖分別進行更多的描述？您能否對您的國內和出口銷售組合以及相對於行業水平的組合變化發表任何評論？

Yes. This is Albert. The industry exports for polyethylene is about 41% in March. Year-to-date, about 42%. For PVC, it's about 34% for March and 38% year-to-date. And for Westlake, we export less than the industry average in general.

是的。這是阿爾伯特. 3月份聚乙烯行業出口量約為41%。今年迄今為止，約為 42%。對於 PVC，3 月份約為 34%，今年迄今約為 38%。對於 Westlake，我們的出口量總體低於行業平均水平。

And there are no further questions at this time. The Q&A session has now ended. I would like to turn it back to Jeff for closing comments.

目前沒有其他問題。問答環節現已結束。我想將其轉回傑夫以徵求結束意見。

Thank you. Thank you again for participating in today's call. We hope you will join us again for our next conference call to discuss our second quarter 2023 results.

謝謝。再次感謝您參加今天的電話會議。我們希望您能再次參加我們的下一次電話會議，討論我們 2023 年第二季度的業績。

Thank you for participating in today's Westlake Corporation's first quarter conference call. As a reminder, this call will be available for replay beginning 2 hours after the call has ended. The replay can be accessed via Westlake's website. Goodbye.

感謝您參加今天的 Westlake Corporation 第一季度電話會議。請注意，此通話將在通話結束 2 小時後開始重播。重播可以通過 Westlake 的網站觀看。再見。