03 March 2009 14:21 [Source: ICIS news]
(Recast with new first paragraph, adds third paragraph)
TORONTO (ICIS news)--Hexion Specialty Chemicals' fourth-quarter results were hammered by $800m (€640m) in expenses over its terminated merger with Huntsman, the US producer said on Tuesday.
Hexion Specialty Chemicals recorded a fourth-quarter net loss of $921m compared with a loss of $63m in the year-earlier period, primarily due to $800m in expenses it incurred to terminate its merger deal with Huntsman, the US producer said on Tuesday.
Huntsman last week reported a fourth-quarter net income of $598m, largely as result of the settlement it received from Hexion and Apollo after the failed merger deal.
Hexion Revenues for the three months ended 31 December fell to $1.18bn, down 20% from $1.48bn in the 2007 fourth quarter, as lower volumes more than offset increased pricing, the company said.
Gross profit fell 53% to $77m. Hexion's operating loss for the quarter was $876m, compared with an operating profit of $21m for the 2007 fourth quarter.
Only Hexion’s performance products segment reported improved fourth-quarter sales and earnings, compared with the year-earlier period.
The other segments - epoxy and phenolic resins, formaldehyde and forest products resins, and coatings and inks – reported lower sales and profits.
“In addition to the impact of the merger termination and settlement costs, Hexion faced extremely challenging market conditions in the fourth quarter of 2008 as our results were negatively impacted by dramatically lower volumes, inventory destocking by customers and extended customer shutdowns due to the global economic slowdown,” CEO Craig Morrison said.
“While our fourth quarter results were disappointing, we remain focused on achieving our restructuring programmes, taking actions to enhance our liquidity position and investing in international markets, such as our forest product expansions currently under construction in Brazil and in Russia, as well as recent growth in our oilfield technology business,” he said.
Hexion expected market conditions to remain challenging in 2009, Morrison added.
However, the company was encouraged by the recent reduction in raw material prices, he said.
($1 = €0.80)
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