US Albemarle Q4 net profit falls 77.6% on polymer additives

27 January 2009 11:44  [Source: ICIS news]

LONDON (ICIS news)--US plastic-additives producer Albemarle reported a fourth-quarter net profit fall of 77.6% to $13.1m (€9.9m) as the automobile and construction sector slump and the downturn in consumer electronics hit its additives business, the company said on Tuesday.

“The fourth quarter was a very challenging quarter,” said Albemarle president and CEO Mark Rohr.

“As we approached year-end, it became clear that the depth and duration of the global economic slowdown was having a greater impact than we initially anticipated.”

Profits were hit also by restructuring and tax charges. Quarterly sales fell 13.6% to $517.7m, Albemarle said.

Albemarle said the sharp decline in fourth-quarter polymer additive sales and profits were partially offset by the performance of its Fine Chemicals business.

“Against this backdrop, efforts to restructure manufacturing assets and improve transactional efficiencies were accelerated, the cost of which are captured in the fourth-quarter charges,” said Rohr.

Albemarle reported a fourth-quarter operating loss of $17.6m, which included layoff and plant closure charges but not a tax gain, against a profit of $77.5m in the fourth quarter of 2007.

Profit in the Polymer Additives segment was $6.2m, compared with $31.63m in the previous year’s fourth quarter, on reduced volumes and higher costs. Segment sales were down 36% at $148.7m.

In the company’s Fine Chemicals segment, fourth-quarter profit was up 6% at $21.9m, with sales up 23% at $161.3m.

The Catalysts segment's profit was down 20.5% to $30.1m, with an 11% fall in sales to $207.7m. 

Albemarle said it expected the recent downturn in consumer electronics, together with already lacklustre demand in the automotive and construction sectors, to affect the Polymer Additives segment's volumes and profitability through 2009.

“Although the company is taking steps to restructure our operations and cut costs, we expect 2009 will be challenging until consumer demand returns and global markets rebound,” it said in a statement.

($1 = €0.76)

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By: Nigel Davis
+44 20 8652 3214

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