NOVA swings into Q1 $123m loss on 57% sales decline

23 April 2009 14:44  [Source: ICIS news]

NOVA Corunna site in CanadaTORONTO (ICIS news)--NOVA Chemicals saw a first-quarter net loss of $123m (€95m), versus a profit of $52m a year ago, as sales revenues dropped 57%, the Canadian petrochemicals producer said on Thursday.

Margins shrank as selling prices fell more than feedstock costs and sales volumes were lower, the company said.

Revenues for the three months ended 31 March were $818m, down from $1.9bn in the 2008 first quarter.

NOVA’s operating loss for the quarter was $120m, compared with an operating profit of $110m in the 2008 first quarter.

However, first-quarter results improved from the 2008 fourth quarter when NOVA recorded a net loss of $212m and an operating loss of $315m, the company said.

In the first quarter, business conditions were relatively stable as feedstock costs and selling prices were much less volatile than in the fourth quarter of 2008, when they fell dramatically, NOVA said.

“Market conditions and the ‘Alberta Advantage’ improved month-to-month, leading to a solid March,” CEO Jeff Lipton said.

The Alberta advantage describes NOVA’s relatively lower feedstock and production costs at its production base in Canada's Alberta province, vis-à-vis US Gulf coast producers.

NOVA is being taken over by Abu Dhabi’s IPIC.

After NOVA shareholders earlier this month voted overwhelmingly in favour of the takeover, closure of the transaction was expected later in the second quarter, Lipton said.

($1 = €0.77)

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By: Stefan Baumgarten
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