UpdateDivestment, higher prices to lift Kemira

30 July 2008 13:21  [Source: ICIS news]

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STOCKHOLM (ICIS news)--Divestments of non-core assets, targeted savings of €50m ($78m) a year, price increases and organic growth will lift Kemira out of difficulties, CEO Harri Kerminen said in a conference call on Wednesday.

Kemira posted a 43% drop in its second-quarter net profit to €18.9m from €33.3m on surging raw material and energy costs. In the first quarter, net profit fell 33%. 

The company’s second-quarter operating profit fell 34% to €37.2m from €56.6m while revenue fell marginally to €741.5m from €753m.

The titanium dioxide (TiO2) joint venture with the US' Rockwood will be finalised in the third quarter and the initial public offering (IPO) of paints producer Tikkurila will take place during next year, the time being dependent on market conditions.

Price increases are under way, but effects may linger up to a year because of long contract periods.

Kerminen sees great opportunities in water chemistry, with scarcity of drinking water and ore concentration plants in the mining industry increasing demands for reuse.

The company has reorganised its operations into three segments - paper, water and oil and mining - and a new management team would also take over from 1 October.

Kemira shares last traded at €7.20, 8.51% down from the previous close on Frankfurt's Xetra platform. 

($1 = €0.64)

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By: Sverker Nyman
44 20 8652 3214

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