Celanese sees return to operating profits in 2000

20 March 2000 12:03  [Source: ICIS news]

LONDON (CNI)--German industrial chemicals group Celanese said Monday it expects to make an operating profit this year due to lower special charges.

However, chief financial officer Perry Premdas said the outlook for the first quarter and the rest of the year is "inevitably very cautious", due to heavy pressure on margins in basic chemicals and acetate filaments. Nevertheless, he added that the Ticona technical polymers, Nutrinova food ingredients and Trespaphan oriented polypropylene (OPP) films businesses have started the year well.

Last year special charges of Euro559m ($541m) resulted in an operating loss of Euro521m, compared with an operating profit of Euro168m for 1998.

The special charges include restructuring costs of Euro218m, which related to reorganisations and closures of administration and production facilities. In addition, the group recorded a Euro203m charge relating to legal proceedings involving Nutrinova and Ticona.

Cost management programmes launched last year should result in annual savings of over Euro100m and increase productivity, stated chief executive officer Claudio Sonder.

Sonder said: "We have achieved our aim of refocusing and restructuring faster than expected and so we are facing the future confidently and resolutely."

Last year all of Celanese's businesses, with the exception of Ticona, suffered reduced 1999 earnings before interest, tax, depreciation and amortisation (EBITDA) excluding special charges. Group EBITDA on continuing operations excluding special charges dropped 35% to Euro377m on stable net sales of Euro4.32bn.

Premdas said volume increases in acetyl products, technical polymers and performance products offset decreases in acetate products and chemical intermediates.

In the acetyl products segment, 1999 EBITDA (excluding special charges) plunged to Euro89m against Euro246m, reflecting a sharp rise in raw material costs. Sales grew 3% to Euro1.56bn.

Premdas said the chemical intermediates and acetates segments had the additional negative impact of lower volumes and prices. Chemical intermediates' EBITDA fell 24% to Euro84m on sales down 4% to Euro884m. Acetate products' EBITDA dropped 38% to Euro95m, while sales were down 12% to Euro739m.

Higher demand within the Ticona technical polymers business led to a 7% rise in EBITDA to Euro123m. Sales increased 5% to Euro788m.

In the performance products segment, increased net sales of Nutrinova failed to offset reduced sales from Trespaphan. EBITDA dropped 19% to Euro42m on sales down 2% at Euro397m.

By: Anna Jagger
+1 713 525 2653

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