09 July 2001 00:00 [Source: ICB Americas]In the wake of a slowdown in the European and global economies, BP is the latest European-based chemical operation to cite profit pressures.
BP says chemical demand and margins have weakened further in the second quarter because of the economic slowdown in US, Asia and Europe.
It has also, however, suffered from the effects of a "significant" outage in an olefins unit at Chocolate Bayou, Tex., following a fire in the first quarter. That incident is expected to cut earnings by $65 million in the second quarter. There have also been recurring production problems at its Scotland-based petrochemicals complex at Grangemouth, as well as extensive maintenance at Lavera, Southern France.
Nonetheless, the company predicts a 3 percent rise in chemical production volumes during the second quarter, following its purchase of Bayer's 50 percent share in Erdoelchemie.
BP's announcement follows Rho-dia's announcement of lower second quarter profits late last month. Rhodia is predicting earnings before interest, tax, depreciation and amortization (EBITDA) 20 percent lower in the second quarter than in the first. It is also lowering its profits forecast for the whole year.
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