UpdateRhodia shares jump 10% on Q3 figures

06 November 2007 13:01  [Source: ICIS news]

LONDON (ICIS news)--Shares in Rhodia surged over 10% on Tuesday after the French chemicals company reported good growth in its third quarter profits.

 

Rhodia’s share price rose 10.2% in Paris to €28.36 (11:30 GMT) despite profits failing to meet analysts forecasts.

 

The company booked third quarter recurring earnings before interest, tax, depreciation and amortisation (EBITDA) of €192m ($279m), up 20% from the same period last year.

 

The result underperformed the UBS end consensus of €198m and Citigroup’s €194m forecast.

 

A UBS equities analyst said Rhodia’s earnings were disappointing, but investors responded to the company “delivering on free cash flow” – which it reported at €53m compared with a negative of €10m in the year-earlier period.

 

Rhodia’s net sales were up 7% to €1.26bn driven by a 9% increase in volume growth and 3% in price hikes.

 

"The level of demand is expected to remain favourable in most regions, with strong volumes and a solid pricing power, in an environment still influenced by high raw material and energy costs," the company said.

 

The foreign exchange environment would remain unfavourable however, the company added.

 

"Rhodia confirms its 2007 outlook of a strong growth in recurring EBITDA and expects to generate more than €100m positive Free Cash Flow for the full year 2007," said the company in a statement.

 

By segment, Rhodia’s growth largely came from energy services, which booked EBITDA of €41m, up from €2m in the same period last year.

 

The silica segment’s earnings were up 53.8% year-on-year to €20m and organics' EBITDA was 28.6% higher at €18m.

 

Rhodia’s main unit, polyamides, reported 1.4% lower EBITDA at €68m, while Acetow and Novecare were down 28.6% and 10.7% respectively.

 

Eco Services’ earnings were down 4.3% at €22m.

 

($1 = €0.69)

By: Mark Watts
+44 20 8652 3214

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