Evonik '08 net income falls 67% as chems unit hit by downturn

24 March 2009 09:36  [Source: ICIS news]

SINGAPORE (ICIS news)--Germany's Evonik has reported a 67% year-on-year decrease in 2008 net income to €285m ($390m) as the global economic crisis hit its chemicals business in “full force” in the last two months of the year, the company said on Tuesday.

Sales rose 10% to €15.87bn but earnings before interest, tax, depreciation and amortisation (EBITDA) slipped 3% to €2.17bn Evonik said.

Last year’s results were affected by €406m in one-off charges, which included impairment losses on assets in Evonik's chemicals business as well as some restructuring costs, it said.

Evonik said it is projecting lower sales and operating earnings in 2009.

“Since the chemicals business area has a dominant position within the group’s operations, Evonik anticipates that 2009 will bring considerably lower sales, which will have a negative impact on EBITDA,” it said.

The chemical division, which accounts for three-fourths of the group’s overall sales, suffered as demand from major end-markets such as plastics, automotive, coatings and construction plummeted last year, the company said.

Chemical sales in 2008 rose 9% to €11.51bn but EBITDA slipped 1% to €1.6bn.

Evonik had scaled back production sharply and took some of its facilities off line in response to the sharp decline in sales volumes.

The company had also introduced short working hours in Germany to prevent dismissals of employees. As of March 2009, the company has around 3,000 employees working short-time hours in Germany.

($1 = €0.73)

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