A Schulman expects steady recovery in its European business

08 July 2010 20:24  [Source: ICIS news]

TORONTO (ICIS news)--A Schulman expects a continued “slow and steady recovery” in its European business, despite the euro zone public debt and financial crisis, Joseph Gingo, chief executive of the US-based plastics compounder and resin supplier said on Thursday.

“We have seen no evidence that Europe is turning down,” Gingo told analysts during Schulman’s fiscal third-quarter results conference call. “We are not hearing, from our clients in Europe, a major concern,” he said.

Gingo’s comments came as many in the industry, including Germany’s chemical trade group VCI, predicted slower growth in Europe in the second half of 2010, largely due to fiscal tightening and the euro zone public debt crisis, which was expected to dampen demand.

However, Gingo said that Schulman’s business was geared towards Europe's economically stronger northern and eastern regions.

The company had only little presence in troubled Spain and Portugal, and Greece, as a market, “almost doesn’t exist for us,” he said. Schulman was active in Italy but had not seen any “major problem” there, either, he said.

However, even with recovery in its European business, Schulman would not yet top its pre-economic crisis performance for its current fiscal fourth-quarter ending 31 August.

“I think we are going to beat [European] 2009 volumes, but not 2008 [volumes] in the fourth quarter,” he said.

The main worry for Schulman in Europe was the weakening of the euro against the US dollar, but that had nothing to do with the company’s underlying operating performance, he said.

Schulman earlier on Thursday reported that its fiscal third-quarter net income more than tripled to $25.8m (€20.4m), up from $7.4m in the year-earlier period as sales rose by 41.2% to $420.3m.

Results were affected by one-off tax benefits of almost $13m and Schulman’s acquisition of Houston-based specialty resins firm ICO.

($1 = €0.79)

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By: Stefan Baumgarten
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