PVC producer Mexichem reports Q4 operational profit up 1%

25 February 2009 19:58  [Source: ICIS news]

(Recasts for clarity)

MEXICO CITY (ICIS news)--Mexichem’s fourth-quarter 2008 operational profit (earnings before interest, tax, depreciation and amortisation) was Pesos (Ps)1.26bn ($84m), 1% higher than the same quarter of 2007, the Mexican polyvinyl chloride (PVC) producer said on Wednesday .

Fourth-quarter sales were 25% higher at Ps8.45bn as volumes fell 3.9% from a year earlier, but the company said it managed to raise average prices by 29.6%. Mexichem did not explain why profits gains had lagged behind sales so much.

The full-year 2008 operational profit was Ps5.27bn, up 21% from 2007, on sales of Ps31.35bn, up 36% on versus 2007, the company said.

During 2008, Mexichem acquired Brazilian PVC tube firm Plastubos, Argentine agriculture services firm Dripsa and Colombia agriculture firm Colpozos, all of which helped boost PVC sales; as well as three other firms, which were not linked to its main business.

Full-year “results were driven by significant growth rates in infrastructure, housing, and agriculture throughout Latin America”, Mexichem said in a prepared statement.

PVC sales were Ps3.7bn in the fourth quarter, down 2.1% versus the same quarter of 2007, and Ps14.57bn for the year as a whole, up 36% from 2007.

Downstream products, most of which are plastic tubes, had net sales of Ps4.8bn in the fourth quarter, up 53% from a year earlier, while full-year sales were Ps17.6bn, up 46% from a year earlier.

“Mexichem’s positive results have been largely driven by the transformed products chain,” the producer said. Sales had grown in Colombia, Brazil, Ecuador and Venezuela, it added.

“For the first quarter of 2009, we expect growth in dollar terms of around 3% in sales, despite the situation of the global markets, thanks to the geographic diversity and broad range of products,” Mexichem added.

The firm ended 2008 with 14% higher net debt, at Ps8.1 bn. But its debt represented 1.54 times earnings, down from 1.64 times at the end of 2007.

($1 = Ps14.82)

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By: Alex Manda
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