R&H sees Q1 '03 'similar' to '02 citing higher costs

24 March 2003 14:54  [Source: ICIS news]

HOUSTON (CNI)--Specialty chemicals producer Rohm and Haas (R&H) said Monday it expects first quarter 2003 net earnings to be in the 34-37 cent/share range - similar to the 2002 first quarter earnings of 36 cent/share excluding accounting changes.

Philadelphia, Pennsylvania-based R&H said 2003 first quarter sales are anticipated to be 13-15% higher than the same period in 2002.

But R&H said its costs have been "significantly impacted" by rapidly escalating raw material and energy costs.

Said R&H in a statement: "The gap between raw material increases and selling prices compared to the fourth quarter 2001 is expected to be approximately $40m (Euro37.7m) as raw materials are rising faster than the company's ability to implement price increases and energy surcharges."

Other major costs included the accelerated depreciation related to R&H existing isothiazoline production in Bayport, Texas as well as higher pension, insurance and healthcare costs.

Raj Gupta, R&H chairman and chief executive, called it  "an understatement" to say that these are difficult times for the industry.

Gupta added: "A tough economic environment and anxiety over global events are significant. In the last two weeks, we are seeing some slowing of demand in North America, undoubtedly attributable in part to the anxiety and uncertainty over these geo-political events."

However, he continued, R&H's ability to report sales growth in all its business groups, along with an earnings performance similar to the same period a year ago "is a reflection of the leverage from the cost control initiatives implemented since mid-2001."

R&H is a specialty chemical company which makes products for the personal care, grocery, home and construction markets and electronics industry.

By: Mike Sheridan
+1 713 525 2653

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