UpdateFrance’s Arkema trims Q4 net loss to €20m on better margins

04 March 2010 16:56  [Source: ICIS news]

(Adds detail on Q4 segment performance and outlook)

SINGAPORE (ICIS news)--French chemicals maker Arkema said on Thursday that it incurred a smaller net loss of €20m ($27.4m) in the fourth quarter of 2009 from €70m in the corresponding period a year earlier, as margins for two of its three businesses improved.

Sales for the October-December 2009 period still declined 8.5% year on year to €1.08bn, but earnings before interests, taxes, depreciation and amortisation (EBITDA) surged 74% to €82m, the company said in a statement.

“In the fourth quarter of the year, an 8% improvement in volumes over the same quarter of 2008 together with the benefits from the cost-cutting initiatives implemented throughout the year led to a 74% EBITDA increase,” Arkema said. Prices, however, were 13% lower.

Vinyls and acrylics prices were affected by lower raw material costs. In the 2008 quarter, caustic soda and raw material prices had been high.

Arkema said that imports into Europe of polyvinyl chloride (PVC) products from the US, based on lower-cost ethylene and the weaker dollar, had put pressure on prices in the latest quarter.

EBITDA margins grew to 7.6% in the last three months of 2009 from 4.0% in 2008, with margins for industrial chemicals rising to 14.6% from 11.5% and those for performance products rising to 9.2% from 4.2%, it said.

Margins at its vinyl products segment, meanwhile, remained negative. The operating loss for the segment narrowed to €18m from €24m, although sales dipped lower by 16.7% to €234m..

For the whole of 2009, Arkema had a net loss of €172m, reversing a €100m profit it made in 2008, while sales for the period declined 21% year on year to €4.44bn, the company said.

“We target a significant improvement of our sales and EBITDA in 2010,” Arkema said, based on strict cash-flow management, an improved cost base and an increased presence in Asia in higher-performance polymers and renewable energies. The company has a 13.5% mid-cycle EBITDA margin target for 2014. The EBITDA margin in 2009 was 7.0%.

($1 = 0.73)

Nigel Davis contributed to this article

For more on Arkema visit ICIS company intelligence
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By: Pearl Bantillo
+65 6780 4359



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