Solvay profits up 11% driven by chems and plastics

08 May 2007 13:14  [Source: ICIS news]

LONDON (ICIS news)--Solvay on Tuesday reported 11% growth in first quarter recurring earnings before interest and tax (REBIT) to €325m ($441m) driven by improved operating margins in the Plastics and Chemicals sectors.

 

The Belgium-based group’s sales increased by 1% to €2.37bn, with growth in Plastics offsetting a weaker performance in Pharmaceuticals.

 

In the Chemicals sector, REBIT increased 6% to €93m due to stable volumes and prices trending upwards. Sales in chemicals were on a level with first quarter 2006.

 

Soda ash activities were a highlight in the unit, improving on increased demand and pricing despite the continuation of high energy costs, said Solvay.

 

In the Plastics unit, REBIT improved by 15% to €120m driven by continued growth in Specialty Polymers and the vinyls cluster. Sales were up 6% year-on-year to €992m.

 

Speciality Polymers’ volume growth was down to strong demand in high-added-value markets such as consumer electronics, aerospace and medical applications.

 

Vinyls benefited from better spreads, good volumes and a reinforced competitive position in Europe and Brazil, the company said.

 

“The year began with a generally favourable business climate,” said Solvay in a statement.

 

“Overall for 2007, we are confident that we can achieve the excellent operating results of last year. Obviously, we remain attentive to the evolution of worldwide macroeconomic conditions, energy costs and the Euro/US dollar exchange rate,” it added.

 

The group’s EBIT increased 55% in the first quarter to €317m. However, this took into account €77m of non-recurring items in first quarter 2006 imposed by restructuring costs in the Pharmaceutical sector.

 

($1 = €0.74)

By: Mark Watts
+44 20 8652 3214

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