France's Arkema expects best quarter in Q2 since spin-off

01 July 2010 13:53  [Source: ICIS news]

LONDON (ICIS news)--Arkema expects its second quarter sales and earnings before interest, tax, depreciation and amortisation (EBITDA) to be the group’s best quarter results since its spin-off from energy group Total in 2004, the French chemical producer said in a trading update on Thursday.

This would mean the group's second quarter EBITDA would better the €159m ($194m) Arkema witnessed in the first quarter of 2008.

Arkema said that the improvement witnessed in the economic environment during the first quarter of 2010 had continued throughout the second quarter, and that the group had benefited from the strong seasonality effect in its fluorochemicals, specialty and coatings chemicals businesses.

Several other factors have contributed to Arkema achieving an improvement in its trading performance, including ongoing cost cutting and the ramp up of a new HPC-125 refrigeration production unit in Changshu, China.

Arkema has also been benefited from the integration of the acrylic assets acquired from Dow in the US in January. After acquiring the acrylic acid and esters plant in Clear Lake, Texas, the group became the second-largest producer of acrylics in the US at a time when prices have soared in both the US and Europe.

Following a slew of production outages in both regions, the top level of European acrylic acid spot prices increased 86% since January, reaching highs of €2,300/tonne FD (free delivered) NWE (northwest Europe) in June. In the US, contract prices nearly doubled from December 2009 levels, reaching highs of $2,623/tonne FD in June.

In May, Arkema reported a swing to a net income of €40m for the first quarter of 2010, reversing a net lost of €35m in the year-ago period, on increased Asian demand and a recovery in the North American market.

The group said it would be releasing its second quarter results on 3 August 2010.

Additional reporting by Libby George

($1 = €0.82)

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