Chemical/plastics take OMV into red

05 September 1994 00:00  [Source: ICB]

LOSSES of Sch2bn ($172.2m) in chemicals and plastics contributed to the overall Sch924m loss on ordinary activity in 1993 posted by Austria's OMV.

And with only a slow recovery predicted for both businesses this year, neither is expected to return to the black in 1994, although in Q1 the group recorded a pre-tax profit of Sch190m on ordinary activities.

The group's total loss of Sch4.43bn included an extraordinary charge of Sch4.3bn to cover restructuring moves and closures (ECN 20 September 1993). Further restructuring moves are underway.

Cost cutting was the sole cause of the decrease in losses in plastics to Sch1.2bn from Sch1.53bn in 1992, Dr Wolfgang Ruttenstorfer, chief finance officer, told ECN.

He expects losses in this division to fall to under Sch1bn this year, again through cost cutting. Revenues for the division declined 8.8% in 1993 to Sch7.18bn, although volume-related turnover fell by only 2%.

Losses by the chemicals division deteriorated, falling to Sch860m from Sch550m in 1992. Industrial chemicals showed the heaviest losses, aided by a considerable drop in melamine prices.

Fertilisers suffered from dropping prices, while plant protection agents turned in a positive, if flagging, performance.

Fine chemicals and chemical specialities performed well. Due to restructuring moves and closures, the division should be 'near to balance' this year, said Ruttenstorfer.

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