DuPont cautious on acquisition opportunities - CFO

27 January 2009 16:24  [Source: ICIS news]

TORONTO (ICIS news)--DuPont continues to look for growth, especially in its agricultural and safety and protection divisions, but will be cautious in making any acquisitions even though many assets are being offered at very attractive terms in the current environment, the company's chief financial officer said on Tuesday.

“But we are going to be cautious [on acquisitions] … until we get a bit more visibility,” said Jeffrey Keefer during the company’s fourth-quarter analysts’ briefing.

“Asset values are down. I think those opportunities are going to be out there, but we are going to be cautious about jumping a little too early,” he said.

Keefer was responding to an analyst who asked if DuPont’s balance sheet was strong enough for the company to act quickly should an attractive $400-500m (€304-380m) acquisition opportunity arise.

As for the economic outlook, DuPont was not expecting a recovery but was assuming that markets would remain down in 2009, said Keefer.

However, DuPont was acting from a position of strength and expected to see an improvement in its performance in the second half of the year as its restructuring, costs savings and productivity measures were taking hold, he said.

“We are not waiting for a recovery. What we are focused on are our actions and the things we can control,” Keefer said.

CEO Ellen Kullman said DuPont would emphasise cost control, productivity and cash generation, but it would continue to invest in high-growth projects such as seeds and biofuels, even as it was “in the midst of a continued challenge and dislocation on a global basis”.

“We will emerge, in partnership with our customers, stronger, leaner and more agile and better poised for growth,” Kullman said.

DuPont earlier on Tuesday reported a $629m loss for the fourth quarter and warned of a weak first quarter.

The company said it was making about $730m in fixed cost and $1bn in working capital reductions.

Analysts at London-based international bank HSBC said in a research note that DuPont’s fourth quarter was weak across the board.

“The company reported year-on-year volume declines of 20% across its portfolio but what was particularly worrying was a 20% year-on-year volume decline in Asia Pacific,” the bank said.

HSBC rates DuPont’s shares “buy” with a target price of $33.

The shares were down 3.19% to $22.44 in Tuesday morning trading in New York.

($1 = €0.76)

For more on DuPont visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect

By: Stefan Baumgarten
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