Ecovyst (ECVT) has a solid run into 2022. In fact, fourth quarter sales were his $182.8 million, below the consensus $189.3 million, but this was due to the Winter Storm Elliott-induced production shutdown and unplanned It was due to maintenance. Increased from the previous year due to increased pricing and volume of refurbished services. Adjusted net income rose 38.9% to his $31.8 million, which more than offset higher variable costs for energy, transportation and turnarounds. Last year, net earnings per share were further boosted to 47.1% of his to 25 cents.

Unfortunately, the impact of the storm on Q4 results was minimal, but ECVT expects the associated production stoppages to lead to lower availability and sales of virgin sulfuric acid in the first quarter. With most of the associated maintenance and repair costs also occurring in this quarter, ECVT expects his 2023 revenue to be $760 million to $790 million. today.

However, this lower view also includes a reduction in pass-through prices of about $95 million due to lower average sulfur prices, which will have minimal impact on actual profit levels. As such, his $292.5 million, the midpoint of his adjusted EBITDA forecast of $285 million to $300 million for ECVT in 2023, is only $2 million lower than the consensus view of $294.5 million. Become. In fact, add in the roughly $7 million to $8 million negative impact ECVT has on Q1 Adjusted EBITDA, and the midpoint is closer to his $300 million, making him more than $5 million more than expected. Faster.

In my view, this continues to reflect strong underlying demand for virgin sulfuric acid and reclaim services remaining thanks to high refinery utilization. Growing need for premium fuels with high octane rating and clean combustion. Positive demand fundamentals across multiple industries, especially the mining sector. As these favorable trends carry over into 2023 and demand for solutions that support low-carbon and green technologies remains strong, operating profit at the midpoint despite the blows of the storm, even with weaker guidance increased by 5.7%. And when you factor in that the significantly reduced share count further increases his earnings per share, it’s not hard to see why the earnings growth is even more impressive. As this goes well, I expect the stock to recover in kind.


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