Basell sees strong Q2 on price rises, catalyst sales

19 May 2006 16:43  [Source: ICIS news]

LONDON (ICIS news)--Basell expects its second quarter financial results to beat those for the second quarter of 2005, aided by price increases, chief financial officer Alan Bigman said on Friday.

 

“Q2 is shaping up to be a strong quarter and could very well be stronger than 2005,” he said in a conference call for analysts.

 

He pointed to the implementation of price increases in the first few weeks of the second quarter, as well as a strong catalyst sales.

 

Cracker margins increased in April, Bigman noted but have come under pressure again on increased naphtha prices.

 

Following a difficult Q1 in North America, he said demand was picking up in the region.

 

Basell reported on Thursday a 15% drop in Q1 EBITDA (earnings before interest, tax, depreciation and amortisation), on poor cracker margins in Europe and weaker results from North American polyolefins.

 

Basell, the world's laregst polypropylene producer and a leading polyethylene maker, remained optimistic about plans to invest in Kazakhstan, Bigman said. “We’re very excited about this opportunity.”

 

Last month the company agreed to participate in a joint venture petrochemicals complex in the country, based on competitive feedstock supplies. The project, expected to start up in 2010, would include an ethane extraction unit, a propane dehydrogenation plant and polyethylene and polypropylene facilities, said Bigman.

 

The economics have not yet been finalised, he continued, but the investment will be “of the same order of magnitude as the Saudi investments”.

 

Basell expects to invest some Euro200m ($254m) in Saudi Arabia - through a cracker joint venture, signed earlier this month, and a propane dehydrogenation and PP joint venture, he said. The second Saudi joint venture is expected to be signed in the second quarter of this year, noted a Basell spokesman. The Saudi projects are scheduled to start up in 2008.

 

Feedstock contracts for the proposed Kazakhstan project have not yet been finalised, said Bigman, but gas prices are expected to be similar to or slightly higher than Middle East prices.

By: Anna Jagger
+44 20 8652 3214

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