US Hexion reports $53m Q3 net income on lower legal costs

16 November 2009 16:19  [Source: ICIS news]

HOUSTON (ICIS news)--US resins producer Hexion Specialty Chemicals reported on Monday a third-quarter net income of $53m (€36m), up over a net loss of $75m for the same time last year on lower costs connected to legal expenses and cancelled mergers.

Last year, Hexion took a $51m hit from costs associated with its failed $10.6bn merger with Huntsman. The deal has been mired in a tangle of lawsuits.

In addition to lower legal costs, Hexion reported a $41m gain connected to paying off debt, the company said.

The one-time gains offset a 33% drop in net sales, Hexion said. The company reported third-quarter net sales of $1.08bn, down from $1.61bn reported for the same time last year.

Hexion attributed the drop to lower volumes, unfavourable currency exchange rates and lower sales prices. The drop in prices was the result of contracts that required Hexion to pass through lower raw material costs.

Hexion reported $128m in earnings before interest, tax, depreciation and amortisation (EBITDA), down 1.5% from $130m reported for the same time last year. However, last year's EBITDA were affected by $12m in hurricane-related costs, the company said.

Despite the year-over-year declines, third-quarter performance did improve over the second, the company said. Third-quarter EBITDA rose 42% over the previous quarter.

Nonetheless, key end markets remain weak, according to a statement by Craig Morrison, CEO. As such, Hexion will continue to find ways to cut costs.

($1 = €0.67)

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By: Al Greenwood
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