US Georgia Gulf Q2 operating income down 57%

08 August 2007 23:19  [Source: ICIS news]

HOUSTON (ICIS news)--US vinyls and building-products producer Georgia Gulf reported on Wednesday a second-quarter operating income of $32m (€23m), down 57% from the same period last year, as the company struggled with higher feedstock costs and lower sales.

Total operating costs and expenses were $819m, up 55% from $527m reported in the second quarter of 2006.

Second-quarter chlorovinyl sales were $366m, down 21% from $465m reported during the same time last year. Higher feedstock costs and lower sales volumes caused the drop, the company said.

Net sales for the outdoor building products were $184m, compared with $198m in 2006, when the segment was still part of Royal Group. Georgia Gulf acquired Royal Group in 2006.

Net sales for windows, door profiles and mouldings were $137m, compared with $156m in 2006.

Georgia Gulf attributed the drops in the two segments to the slowdown in the US construction market.

Aromatics net sales were $164m, compared with $137m reported in the second quarter of 2006. Sales rose because of higher volumes and prices, the company said.

Overall, Georgia Gulf reported a second-quarter net loss of $4m, compared with a net income of $39m reported during the same time last year.

"Difficult market conditions for both chlorovinyls and building products, coupled with additional income tax expense, left us short of our net income expectation for the second quarter," said Ed Schmitt, chief executive.

"Rising chlorovinyls raw materials costs driven by energy cost increases continue to put pressure on our margins," he said.

($1.00 = €0.73)
By: Al Greenwood
+1 713 525 2653

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