22 July 2005 17:00 [Source: ICIS news]
Rohm and Haas (R&H) surged past Wall Street expectations with robust profit gains, as did
R&H beat Wall Street expectations, posting a 46% gain in underlying earnings to $172m (Euro142m) on 11% higher sales of $2bn. Earnings per share (eps) of 77 cents bested Street estimates by 4 cents.
“Our performance reflects the ongoing emphasis on implementing price increases to recover extraordinarily high raw material and energy costs, while maintaining tight control over our expenses,” said chairman, president and chief executive Raj Gupta.
However, he noted that demand remains anemic in
R&H's cash flow as measured by earnings before interest, taxes, depreciation and amortisation (EBITDA) rose across most segments, including coatings (+14%), performance chemicals (+4%), monomers (+102%), electronic materials (+4%) and adhesives and sealants (+26%). Salt EBITDA came in flat.
While demand remained sluggish across some markets, especially in
Looking ahead, the company expects full year sales growth of 8 to 10% and eps in the range of $2.75-$2.90, representing gains of between 25 to 32%.
“The catalysts segment continues to perform above our expectations, driven by strong demand for hydroprocessing catalysts, excellent pricing momentum and cost synergies,” said president and chief executive Mark Rohr. “We believe that our fine chemicals turnaround plan is on track and we are realising the benefits of our strong bromine chemicals position.”
Polymer additives segment operating profits rose 30% to a record $29.4m on 14% higher sales of $204m, driven by strong performance in brominated flame retardants and overall gains in pricing.
The catalysts segment, which includes the acquisition of Akzo Nobel’s catalysts unit, generated $24.3m in operating earnings on sales of $147m.
Fine chemicals segment operating profits improved 30% to $14.9m as sales gained 23% to $151m. Along with higher bromine and derivate prices and new products, the company’s
However, investors were less than impressed, sending shares of
“Despite reporting a solid second quarter with earnings above expectations, signs of polymer additive volume weakness early in the third quarter resulted in
Nova posts $25m loss
Nova posted a loss of $25m, or 29 cents in the second quarter, as the company was plagued by three unusual events - the 16 April Corunna power outage ($20m after-tax), the 21 June Joffre ethane interruption ($4m) and an insurance accrual ($15m). Wall Street had been expecting a profit of 9 cents per share.
Excluding the unusual events, Nova would have posted net income of $14m in the quarter versus $27m in the year-ago period and $94m in the first quarter of 2005. Sales rose 7% year-over-year to $1.33bn.
“It is pretty clear our industry was impacted by a large global inventory correction during the second quarter as customers consumed much more of our products than they purchased,” said president and chief executive Jeff Lipton. “We saw a number of positive signs in June indicating that customers were again buying to meet their full production needs, and we expect the third quarter to begin a return to stronger business conditions for our industry.”
In the olefins/polyolefins sector, net income of $45m was down from $112m in the first quarter. Polyethylene prices were down 11% on 4% lower volumes.
The styrenics segment’s net loss widened to $76m versus $21m in the first quarter as styrene monomer spot prices fell 25% and polymer volumes declined 6%.
Despite the tough results, Nova has authorised a stock buyback of up to 10% of its public float, representing 7.25m shares. At today’s share price of around $36, the buyback would cost about $260m.
“We believe that buying Nova Chemicals’ common shares represents an effective use of the company’s financial resources,” said Lipton.
Methanex strong and steady
Methanex posted a 20% gain in second quarter profits to $62.9m, or 53 cents per share on flat sales of $411m. However, profits were down from $76m earned in a strong first quarter.
“Methanol pricing remained strong and relatively stable in the second quarter, underpinned by continued high global energy prices,” said president and chief executive Bruce Aitken. Methanex’s average realised price for the second quarter was $256/tonne versus $225 for the year-ago period and $262 in the first quarter.
(For additional Chemical Market Reporter analysis, visit the CMR Web site at http:/chemicalmarketreporter.com.)
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