Chem outlook good despite feedstock costs - Exxon

31 July 2008 20:38  [Source: ICIS news]

HOUSTON (ICIS news)--US energy giant ExxonMobil is still confident about the long-term prospects of its downstream business, even though record-high feedstock costs are eating into the profit margins of its chemical sector, the company said on Thursday.

“Long term, we see chemical business as growing,” said Henry Hubble, vice president of investor relations.

The US energy major said its second-quarter chemicals earnings fell 32% to $687m (€440m) from $1.11bn a year ago. Plummeting margins due to increased feedstock prices were only partly offset by favourable foreign exchange rates and tax effects, the company said.

“The impact on the rapid run-up in feedstock costs has been negative,” Hubble said. “Aromatics were hit hardest, but given the overall robust environment, we feel good.”

($1 = €0.64)

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By: Steven McGinn
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