06 August 2008 23:33 [Source: ICIS news]
The company barely managed to meet its covenants during the second quarter, said PJ Juvekar, an analyst with Citigroup. Moreover, Georgia Gulf's debt covenants will steadily tighten through 2010.
Georgia Gulf has struggled as the US housing market remained in a multi-year slump. House construction is a major end market for PVC.
Moreover, Georgia Gulf also makes building products, which increases its exposure to the construction market.
Georgia Gulf does not expect any significant recovery in the US housing market during the next six to 12 months, said Paul Carrico, CEO. Carrico made his comments during a second-quarter earnings call.
At the same time, Georgia's Gulf's pricing has not kept up with rising feedstock costs, said Gregory Thompson, chief financial officer.
As such, the company is expecting a year-over-year decline of up to 15% in earnings before interest, taxes, depreciation and amortisation (EBITDA).
Shares of Georgia Gulf closed on the New York Stock Exchange at $3.35 (€2.18), down1.47%.
($1 = €0.65)
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