Courtaulds' margins cut by raw material prices

29 May 1995 00:00  [Source: ICB]

COURTAULDS REPORTED total sales for the year ended 31 March 1995 up 7% to £2.13bn ($3.35bn). Pre-tax profit rose 3% to £151m. However, the group said raw material prices had 'severely eroded' its margins over the past year. Chief executive Sipko Huismans said that spot prices for acrylonitrile, for example, had ranged from $600-1800/tonne. 'We did not pay $1800/tonne, but you can assume we more than doubled the price we paid for ACN. We are more able now to get prices up but with some reluctance because we see the effect on our customers... they cannot absorb the price increases any easier than we can.' But Huismans was confident the squeeze would be alleviated in due course.

'Unprecedented' price increases in caustic soda and woodpulp reduced US margins for viscose rayon to only half those of 1993-94. The fibres and chemicals business was dominated by a raw material costs during the last seven months of the year. Acetate yarns had an 'excellent year' and the fine chemicals business maintained its performance.

In coatings and sealants, packaging, coil and powder all showed significant increases in volume and profit. In polymer products, rigid packaging suffered an 'acute' squeeze on margins. Performance films made progress but aerospace composites sales fell sharply. Oriented PP film increased profits and Amtico flooring sales grew by 13%.

Huismans also stressed the importance of the Far East, where sales volumes were up by more than 20% - sales in the Asia-Pacific region rose to £259m, up 5%. But profit - £22m compared to £24m in 1993-94 - was affected by a poor performance from Australian Architectural in the second half. Startup costs from new investments in the Far East also impacted profits. Courtaulds' new lyocell fibre, Tencel, has not made a profit but this is anticipated when the first phase of Tencel manufacture at Grimsby, UK, is underway in 1997.

Courtaulds results for year to 31 March 1995, £m
	Turnover	Change, %	Op profit	Change, %
Coatings & sealants	896	2	64	3
Polymer products	339	*	28	*
Fibres & chemicals	901	24	84	*
Total	2131	7	167	*
*Results in 1994 of £352m, £32m, £93m and £177m respectively

< previous article(VIDEO – ICIS news Americas Lunchtime Bulletin 18 January 2010)

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly