08 January 2009 00:38 [Source: ICIS news]
HOUSTON (ICIS news)--Weak resin demand in October and November combined with the impact of high feedstock costs hammered NOVA Chemical’s fourth-quarter earnings, company officials said on Wednesday.
“We had very high feedstock costs flowing through our income statement in the fourth quarter, while our product selling prices were based on lower feedstock costs,” said chief executive Jeff Lipton in a conference call with investors.
The negative fourth-quarter flow-through impact was about $300m (€222m), and $400m was released from working capital in the quarter because of a rapid drop in crude oil values, according to NOVA.
Lipton said improving demand and two announced polyethylene (PE) price increases - 7 cents/lb for January and 5 cents/lb for February - were reason for optimism in 2009.
He said January PE order patterns were steady and similar to order rates at this time last year.
A North American PE buyer said current domestic PE demand was extremely weak, however, suggesting that NOVA based its optimistic January demand picture on export business captured late in the fourth quarter.
In the performance styrenics business, NOVA officials said they would discontinue some products lines and cut costs 40% by mid-2009.
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