Cognis annual profits increase 10.7% to €394m

18 April 2007 12:00 [Source: ICIS news]

LONDON (ICIS news)--Specialty chemicals firm Cognis reported a 10.7% year-on-year increase in annual adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) to €394m ($535m).

The Monheim, Germany-based company said on Wednesday that net sales increased in all strategic business units with group turnover increasing 6.2% to €3.37bn.

Cognis said improved results were attributable to growth in sales volume, the associated capacity utilisation and ongoing efficiency improvement measures, driving pre-tax profits to €42m in 2006 from a €136m loss the year earlier.

“The significant improvement in our operating results was achieved in spite of a sharp fall in the price of fatty alcohol-based products, as well as increased energy and raw material costs,” said chief executive Antonio Trius.

Cognis’s largest business unit Care Chemicals saw sales rise by 5.6% to €1.36bn, with lower sales of fatty alcohol products offset by growth in surfactants and specialties. The acquisition of Cosmetic Rheologies in March 2006 re-inforced the unit’s growth.

Nutrition and Health sales increased 4.2% to €316m driven by high-margin sterols, conjugated linoleic acid (CLA) and products for the pharmaceutical and healthcare industries. Sales of food technology and vitamin E projects fell slightly.

The Functional Products unit saw the biggest rise in sales, up 10.4% to €841m. Cognis said growth was strongest overall in Asia and the business units: polymers, coatings & inks, AgroSolutions, mining and synthetic lubricants business.

Sales increased by 4.1% to €258m in the Process Chemicals business unit which makes products for the textile and leather industries. Cognis said strong demand in the Asia Pacific region was a major growth driver.

Cognis Oleochemicals – a joint venture with Malaysia's Golden Hope – saw sales fall 0.7% to €553m, impacted by an oversupply of glycerine putting pressure on prices.

The Cognis group said it would continue to focus on markets serving sustainability and renewable resources.

“Renewable resources already account for the majority of our raw materials, and this will continue to be our key focus,” said Trius.

Cognis shares were 1.8% up on Tuesday's close in Germany at €109.38 (11:00 GMT).

By: Mark Watts
+44 20 8652 3214

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