US Rockwood expects to maintain margins in Q4 amid stabilising raws

26 October 2010 18:36  [Source: ICIS news]

HOUSTON (ICIS)--US specialty chemicals maker Rockwood Holdings expects to maintain healthy margins through the end of the year largely due to stable raw material prices and new products, the company said on Tuesday.

“As we move into the fourth quarter, business remains strong and our (third-quarter) growth rates will continue,” chief executive Seifi Ghasemi said during the company’s quarterly earnings conference call.

The company’s strong third-quarter showing - net income rose to $40.5m (€29m) from $10.2m one year ago - bolstered its full-year outlook.

Net sales and earnings before interest, tax, depreciation and amortisation (EBITDA) increased in all of the company’s businesses, which include specialty chemicals, performance additives, advanced ceramics, titanium dioxide (TiO2) and specialty compounds.

Ghasemi said Rockwood anticipated no difficulty obtaining higher prices, when needed, in order to maintain current margins. The company increased TiO2 prices in June and October, for example, and expected to gain further on 1 January, he said.

In its advanced ceramics segment, third-quarter business was up 28% year over year due to new product launches, the company said. Looking ahead, typical year-over-year growth of 8-10% was forecast.

With $300m in cash expected by the end of the year, Rockwood said it would consider small bolt-on acquisitions in ceramics, surface treatment and performance additives.

But no acquisitions were being considered for its lithium or TiO2 businesses, Ghasemi said.

“Supply of battery-grade lithium is tight,” he conceded. “But we don’t see any assets worth buying ... and our operations are the lowest-cost in the world.”

The company is continuing to invest capital in its lithium projects in Nevada and North Carolina, he added.

“We are absolutely committed to having the material available for our customers,” he said, “and I see no problem with us meeting that commitment.”

($1 = €0.72)

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By: Larry Terry
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