10 August 2006 12:25 [Source: ICIS news]
LONDON (ICIS news)--Borregaard's second quarter chemicals profits fell 20% to NK51m ($8.2m/€6.4m) due to low production and high costs at its Swiss plant, parent group Orkla said on Thursday.
The decline, at an earnings before interest, tax deprecation and amortisation (EBITDA) level, was on chemicals sales down 5% to NK1.03bn.
Norwegian groceries, aluminium and chemicals group Orkla, however, reported that Borregaard's overall EBITDA for the period was up 17% at NK112m as gains were made on the sale of hydroelectric power energy from the firm's production plants.
Borregaard's hydroelectric power-based energy business generated 91% higher EBITDA in the quarter at NK61m, on sales 67% higher at NK127m.
Borregaard's overall quarterly EBITDA increase was achieved on flat sales at NK1.12bn.
Orkla said the specialty cellulose market had improved but overall business conditions remained challenging.
Improvement programmes were in place, it said, designed to help offset an unfavourable currency situation and high oil-related costs.
“We are improving our product mix and cutting costs and that is helping profits remain at this good level,” Orkla’s executive vice president for specialty materials, Ole Enger said.
Borregaard makes lignin-based binding and dispersing agents; special cellulose for chemicals applications and fine chemicals for the pharma, food and other markets.
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