US: The reported net income for the first quarter of 2023 was $156.3 million, resulting in $1.16 per diluted share. This is a significant decline from the first quarter of 2022, which reported a net income of $393.0 million, or $2.48 per diluted share. Adjusted EBITDA for the first quarter of 2023 was $434.1 million, excluding depreciation and amortization expense of $137.1 million and restructuring charges of $60.9 million. In comparison, the first quarter of 2022 had an adjusted EBITDA of $710.9 million. In the first quarter of 2023, sales plummeted to $1,844.3 million from $2,461.4 million in the same period of the previous year.

Olin's Q1 performance demonstrates the resilience of its winning model. The company was able to deliver significantly higher recessionary trough level adjusted EBITDA compared to its historical approach, highlighting its ability to weather economic downturns.

During the first quarter, Olin's Chlor Alkali Products and Vinyls team adjusted its market participation strategy due to caustic soda becoming the weaker side of the Electrochemical Unit (ECU) versus chlorine and chlorine derivatives. To remain competitive, the company realigned its operating rates and product purchases to match the market conditions for caustic soda. As a result, Olin refrained from selling incremental volume into poor-quality markets.

The Epoxy business is experiencing difficulties due to weakened demand in Europe and North America, compounded by the continuation of elevated exports from Asia and slow growth in Chinese domestic demand. However, in the fourth quarter, Winchester took decisive actions which resulted in sequential improvement in segment results. Furthermore, the improvement was largely driven by increased demand from both domestic and international military markets.

Considering the current challenging global economic conditions, Olin Corp has forecasted that its chemical businesses' second-quarter 2023 results will be slightly lower than those of the first quarter. However, it anticipates sequential growth for Winchester business in Q2 2023 as commercial customer inventories become more normalized. Overall, the company expects to report lower adjusted EBITDA levels for Q2 2023 as compared to Q1 2023.

The joint venture of Blue Water Alliance has commenced its operations in the first quarter of 2023 and is now consolidated in the Chlor Alkali Products and Vinyls segment. Unfortunately, the sales of Chlor Alkali Products and Vinyls fell from $1,245.2 million in the first quarter of 2022 to $1,117.1 million in the first quarter of 2023. This was primarily due to a 12% reduction in volumes, despite higher pricing. Segment earnings also declined from $328.6 million in the first quarter of 2022 to $245.9 million in the first quarter of 2023. This $82.7 million drop in earnings was mainly caused by lower volumes, coupled with a decline in vinyls intermediates. Despite this drop, higher pricing was observed across all other products. Additionally, the first quarter 2023 results include depreciation and amortization expenses of $114.4 million as compared to $123.1 million in the first quarter of 2022.

In the first quarter of 2023, Epoxy sales reached $360.7 million, a significant decrease from $789.5 million in the same quarter of the previous year. The drop in sales can be attributed to a 31% decrease in resin and systems volumes and a $184.7 million decrease in cumene and Bisphenol A sales.

As part of the restructuring plan to optimize the cost-effective asset base supporting our strategic operating model, the Epoxy business ceased operations at our cumene facility in Terneuzen, Netherlands, in the first quarter of 2023. Furthermore, one of the company's Bisphenol A production lines at our Stade, Germany facility was halted in the fourth quarter of 2022.

During Q1 2023, segment earnings were only $21.4 million compared to $138.0 million in the first quarter of 2022, experiencing a $116.6 million decrease. This decline in earnings was mainly due to lower volumes and pricing, offset by lower raw material and operating costs, specifically reduced natural gas and electrical power costs. Additionally, Q1 2023 results included $14.5 million in depreciation and amortization expenses, compared to $20.4 million in the first quarter of 2022.

Winchester's sales for Q1 2023 amounted to $366.5 million, a significant decline from the $426.7 million recorded in the same quarter of the previous year. The decrease was attributed to the lower shipment of commercial ammunition. Despite this, the company saw an increase in military and law enforcement shipments.

To address overfilled supply chains, Winchester made a strategic decision to produce and sell fewer commercial ammunitions in Q4 2022 and Q1 2023 to preserve its value.

In terms of segment earnings, Q1 2023 showed a significant decrease of $57.9 million compared to Q1 2022, recording $61.0 million and $118.9 million, respectively. The decline was primarily driven by lower commercial ammunition shipments and higher costs of commodity and other materials. However, Winchester partially offset this decline through higher sales of military and law enforcement products.

It is noteworthy that the Q1 2023 results were inclusive of the $6.2 million depreciation and amortization expense.