16 August 2007 07:34 [Source: ICIS news]
MUMBAI (ICIS news)--Ciba Specialty Chemicals said on Thursday its operating income for the first half of 2007 rose 5% year-on-year to Swiss franc (Swfr) 273m ($225.6m/ €167.5m) on cost savings.
"The process of transforming the business made further progress in the first half, with improvements coming through in operational efficiency and the actions taken in the water and paper treatment segment starting to show results," Armin Meyer, chairman of the board and CEO said in a statement.
The Switzerland-based speciality chemicals company said sales in the first six months this year reached Swfr3.3bn, up 2% from the same period a year ago.
The company which delisted from the New York Stock Exchange (NYSE) in July said income from continuing operations was 32% higher at Swfr155m.
"Raw material costs increased 4% in the first half, with particularly significant increases experienced in petrochemicals and metal-derived raw materials," the company said.
Sales in plastic additives for the first half of 2007 were about Swfr1.1bn, up 1% from the same period a year ago. Operating income margins remained strong at 14.8% of sales despite the heavy increases in raw materials costs, the company added.
Sales in coating effects were Swfr940m in the first half, up 1% from the same period in the previous year. Operating income margin remained at 13.3% of sales.
Sales in water and paper treatment were up 4% at about Swfr1.3bn for the first half.
The company said two paper chemicals plants were closed during the first half.
Growth was impacted by the decision to discontinue a range of low margin surface active additives for plastic, Ciba said.
Ciba said with business conditions in the second half of 2007 similar to those in the previous year, sales for the full year are expected to increase over 2006 levels. This assumed that raw material costs will not continue to rise as they did in the first half.
"The key focus for the second half is to continue to drive through more operational efficiencies, while pushing through additional sales price increases, Meyer said.
"Overall, with our good strategic positioning, the comprehensive actions taken and a strong start to the third quarter, we are confident that the targets for 2007 are within reach."
($1 = Swfr1.21/ €1 = Swfr 1.63)
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