02 November 2006 08:51 [Source: ICIS news]
LONDON (ICIS news)--UK chemicals firm ICI said on Thursday that its third quarter operating profits were 7.6% up from the same period last year before special items at £169m ($322m/€253m), in line with analysts’ forecasts.
Earnings before interest, tax, depreciation and amortisation (EBITDA) for continuing operations were 5% higher than in Q3 2005 at £204m. Sales were 1.8% higher at £1.39bn.
“A good third quarter continued the steady progress ICI has made so far in 2006. Profit growth and cash generation were again good and, taken together with the divestment proceeds from the sale of Uniqema, helped reduce net debt to below £500m at the end of the quarter,” said John McAdam, chief executive.
EBITDA in its paints division rose to £102m from £97m in Q3 last year on sales slightly down at £638m from £639m. On a comparable basis, sales were 3% up.
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Its National Starch division reported an increase in EBITDA of 10.4% to £74m. Sales were 6.6% higher at £502m. Comparable sales were 9% up from Q3 2005.
All business units showed year-on-year growth, ICI said, adding that there was double-digit growth in
EBITDA in its Quest fragrance and flavours division were at £19m, up from £18m in Q3 2005. Sales were up £6m at £148m, with comparable sales up 6%.
“We remain confident that full year profit will be in line with previous expectations, although demand for paint in
“ICI's restructuring initiatives are progressing satisfactorily and the group is well positioned to make further progress in line with its strategic objectives,” he added.
UBS analysts said in a note to clients on Thursday that the results were in line with its forecast and ahead of market consensus.
The analysts added, however, that in its outlook statement, the company said it expected the demand for paints in North America to remain weak and forecast a drop in year-on-year paints profits in the fourth quarter.
"[This] by itself is worrying, but even more worrying is that it might spill over to other areas such as National Starch, which has 38% of sales in this region," they added.
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