27 August 1999 16:02 [Source: ICIS news]
LONDON (CNI)--Weak markets and the extended planned shutdown of an ethylene plant were blamed by Israeli company Electrochemical Industries (1952) Ltd - (EIL) - for a huge rise in first half losses.
EIL made a pre-tax loss of $1m (Euro955 000) in the six months to 30 June compared with a $24 000 deficit in H1 last year. Revenues were down 17.7% to $49.5m from $60.1m, and the company reported an operating loss of $1.43m compared with profits of $2.35m in 1998.
While the first quarter was difficult, the improved markets enjoyed by EIL in the second quarter were offset by the 74-day extended shutdown of Carmel Olefins' 185 000 tonne/year ethylene plant at Haifa. EIL is Carmel's principal ethylene customer.
EIL said in a statement received Friday that the shutdown affected the production of the intermediate products and polyvinyl chloride (PVC), and compelled an intensified import of raw materials at a higher cost than those produced Carmel's plant. "All these factors affected the reported profitability of the company."
In Q2, the company posted a pre-tax loss of $1.38m from profits of $164 000 last time. Sales were down 20.2% to just under $24m from $30m, and operating profits were almost wiped out, falling to $145 000 from $1.4m.
EIL said there were significant increases in PVC prices in Q2 but margins were squeezed as the cost of raw materials also increased, including locally produced ethylene and imports of ethylene dichloride (EDC).
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