25 February 2009 10:54 [Source: ICIS news]
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LONDON (ICIS news)--European speciality chemicals firm Rhodia reported on Wednesday a fourth quarter net loss of €28m ($35.9m), down from a gain of €22m a year earlier due to substantial declines in end-market demand.
Net sales for the quarter fell slightly to €1.13bn from €1.19bn in the same period a year earlier, while operating profits slumped 83% year-on-year to €14m.
“With the ongoing uncertainty in the business outlook and persistent depressed volumes, we are exercising financial discipline and focusing on cash generation,” said Jean-Pierre Clamadieu, chairman and CEO of Rhodia.
“We are also implementing new structural cost-cutting measures to save €150m by 2011, thus improving our competitive position,” he added.
For the full year, Rhodia’s operating profits fell 19% to €309m, with sales up 2.9% to €4.76bn.
In its outlook, Rhodia said the severe economic downturn and the erosion of demand had created a persistent lack of market visibility, adding that its end markets had not shown signs of volume recovery since December.
Although energy and raw material costs had eased, the costly raw materials in stock were still being absorbed in the first quarter and would continue to pressure operating profit, Rhodia said
The polyamide business was the main contributor to Rhodia’s slump in operating profit in the fourth quarter.
The unit posted a recurring EBITDA (earnings before interest, tax, depreciation and amortisation) loss of €8m for the period, down from a gain of €70m a year earlier.
The polyamide business suffered a 31% volume decrease due to plummeting demand from the automotive market and the continuous erosion of housing and textile markets.
Investors reacted positively to the results as the company’s share price rose about 11% on Tuesday’s close to €3.04 at 9:45 GMT.
($1 = €0.78)
Terence Teo contributed to this article
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