Dupont Canada Reports Record Annual Earnings for the Sixth Consecutive Year

DuPont Canada announced record results for the year ended December 31, 1999. Sales of $2211 million for the year rose 9%, while net earnings from continuing operations of $253 million, or $2.72 per share, climbed 15% over the previous record posted in 1998. Cash flow from operations reached $253 million for the year. This marks the sixth consecutive year of record earnings from continuing operations.

"We are pleased to have delivered a 40% shareholder return to our investors", said Dave Colcleugh, Chairman, President and CEO. "DuPont Canada continues to generate strong earnings and cash flow, further enhancing its already strong financial position. The company is well poised for future growth initiatives."

Net earnings from continuing operations for the year ended December 31, 1998, were $220 million, or $2.37 per share. An additional $79 million, or $0.84 cents per share, was realized from the sale of the Company's hydrogen peroxide operation, which increased 1998 net earnings to $299 million, or $3.21 per share.

Net earnings from continuing operations for the fourth quarter of 1999 were $42.7 million, or $0.46 per share, compared to $59.5 million, or $0.64 per share, for the same period in 1998.

"Year-end inventory reductions by export customers, a firmer Canadian dollar, and lower, more competitive prices in some markets were responsible for the lower fourth quarter sales and earnings," reported Dave Colcleugh. "Demand in the first quarter should be fairly strong and the outlook is for continued positive growth."

Strong year-over-year revenue growth came from both domestic and export markets, which were up 9% and 10% respectively over 1998 annual levels. Higher volume accounted for most of this growth and was generated by each of the Company's five business segments. Strong economic conditions resulted in robust demand from customers in both Canada and the U.S.A., especially those in the automotive, construction, telecommunications and consumer durables markets. Sharply higher sales were delivered by Performance Coatings and Polymers and the Nylon Enterprise segments.

Sales growth has been sustained for the six consecutive quarters ended September 30, 1999. In the fourth quarter, export revenue, principally to the U.S.A., declined by 5% from the quarterly levels experienced at the same time last year. As a result, sales declined to $493 million, 1% below the strong fourth quarter of 1998, primarily the result of lower demand from Nylon Enterprise customers in the U.S.A. who aggressively reduced year-end inventories. Sales are expected to improve in the first quarter of 2000.

Pre-tax earnings of $398 million for the year rose 15% above 1998 pre-tax earnings of $345 million. Strong revenue gains more than offset marginal cost increases. Fixed cost productivity, for example, improved 4% in 1999. Significant earnings growth came from the Nylon Enterprise and the Performance Coatings and Polymers segments. Fourth quarter pre-tax earnings of $71.3 million fell 25% short of last year, primarily due to lower export revenue of manufactured products.