Bayer's chems EBIT to drop on weak PC unit - Citi

01 July 2008 14:27  [Source: ICIS news]

LONDON (ICIS news)--Citigroup on Tuesday said it expected Bayer MaterialScience to post a 27% drop in EBIT (earnings before interest and tax) for 2008 due to a sharp decline in its polycarbonate (PC) margins.

 

The bank forecasted Bayer’s chemicals division to decline further in 2009 before starting to recover in 2010.

 

“Polycarbonate profitability has collapsed due to a very aggressive market share growth strategy from SABIC and Asian supply growth, combined with a sharp fall in optical media such as CD and DVDs,” said Citigroup in a note to investors.

 

The polyurethanes (PU) business was expected to perform better due to a consolidated market and high growth potential, though further raw material hikes could erode profits.

 

The PU division was predicted to post close to €600m ($945m) in EBIT - 70% of the total for Bayer MaterialScience.

 

This division of Bayer - which also has crop science and healthcare divisions - was expected to achieve €5.5bn of sales in 2008, the bank said.

 

The Bayer group reported a 16% rise in first-quarter EBITDA (earnings before interest, tax, depreciation and amortisation) to €2.06bn year on year on a strong performance from its healthcare and crop science business segments.

 

($1 = €0.63)

 

For more on PC visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect

By: Mark Watts
+44 20 8652 3214

< previous article(VIDEO – ICIS news Americas Lunchtime Bulletin 29 Oct 2009)

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly