Stepan Company's Q2 2025: Navigating Contradictions in Surfactants, Agribusiness, and Polymers

Surfactants business performance and raw material cost management, agribusiness growth expectations, polymers business challenges and growth prospects, surfactants business performance and consumer side stability, and asset optimization and strategic focus are the key contradictions discussed in Stepan Company's latest 2025Q2 earnings call.



Adjusted EBITDA Growth and Raw Material Challenges:
- Stepan Company reported second quarter adjusted EBITDA of $51.4 million, up 8% versus the prior year, with Polymers delivering double-digit adjusted EBITDA growth.
- The growth was restrained by a significant increase in oleochemical raw material prices, impacting Surfactant margins.

Dividend Consistency and Shareholder Returns:
- The company paid $8.7 million in dividends to shareholders during the second quarter and declared a quarterly cash dividend of $0.385 per share.
- Stepan Company has paid and increased its dividend for 57 consecutive years, showcasing its commitment to shareholder returns.

Product Volume and Market Diversification:
- Stepan's volume grew 1% in the second quarter, with Polymers up 7% and the NCT product line up 49%, despite a 1% decline in Surfactant volume.
- The growth in Polymers and NCT products was driven by double-digit volume growth in crop productivity and oilfield end markets, offsetting lower demand in the global commodity consumer products end market.

Operational Resiliency and Capital Investments:
- Stepan continued to ramp up production at its new Pasadena, Texas site, producing 31 different products to date, with full benefits expected in 2026.
- The company deployed $25.6 million against capital investments during the second quarter, focusing on operational improvements and new business opportunities.