Sydsvenska Kemi doubles Q1 operating pfts on higher margins

30 April 2002 11:55  [Source: ICIS news]

LONDON (CNI)--Sydsvenska Kemi, the Nordic specialty chemicals company backed by venture capital group Industri Kapital, reported on Tuesday a doubling of first quarter operating profits to SKr116m ($11.3m/Euro12.6m) from SKr56m as a result of higher margins.

Operating margins rose to 18.2% from 12.0%, attributable to a combination of lower raw materials costs, increased production efficiency and lower overhead costs. Pre-tax profits were SKr18m but comparisons with the same period last year were not available. In the fourth quarter last year Sydsvenska recorded a pre-tax loss of SKr258m.

Sales in Q1 2002, however, were down 20% at SKr1.45bn. Adjusted for the divestment of the former Perstorp Chemitec division, the decrease was 7%. This was mainly attributable to lower price levels (six percentage points) as a result of lower raw material prices and to reduced volume (three percentage points), which was partially offset by positive currency effects (two percentage points). The reduced volume was mainly attributable to sales of fewer formalin plants and to lower sales to divested surface-materials and flooring units.

In the Perstorp coating intermediates division, sales were down 1% at SKr624m. Raw materials costs were lower, resulting in a decrease in product prices. However, sales volumes for both basic and specialty polyols rose in Q1, said Sydsvenska Kemi. Profits were not disclosed at divisional level.

Sales of oxy intermediates fell 7% to SKr399m, mainly because petrochemicals product prices were higher in Q1 2001, said Sydsvenska Kemi. However, demand and prices for both raw materials and finished products rose in Q1 2002 and sales were up 8% against Q4.

In the Perstorp performance chemicals division, sales rose 10% to SKr134m principally due to higher demand for formates, which are mainly used in the leather and textile industries.

Sales in the Perstorp engineering materials division were flat at SKr233m. Turnover of composites continued to rise, due to strong demand from the automotive and aerospace industries. However, sales of thermoset products within the compounds unit decreased slightly, due to poor business conditions in the European construction industry.

The Perstorp Formox division's revenues fell 35% to SKr110m on lower demand due to the general economic slowdown, which led to reduced sales of formalin plants. In addition, lower prices for key feedstock methanol led to lower selling prices for the formalin produced and sold by the division. No orders for new formalin plants were received during Q1 although discussions are under way regarding new projects in Asia, Europe and South America. Sydsvenska Kemi said, however, that the lower Q1 sales had a limited impact on earnings.

By: Russell Ong
+44 208 652 3214

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