Kemira Q3 net profit drops 12%, sales and op profit rise on demand

28 October 2010 09:01  [Source: ICIS news]

LONDON (ICIS)--Kemira’s third-quarter net profit dropped 12% year on year to €35.8m ($49.0m), mainly due to the separation of its paints business Tikkurila, but sales and operating profits rose as demand increased, the Finnish chemicals company said on Thursday.

The company said net profit during the third quarter last year included figures related to its Tikkurila business, which was spun off from Kemira in March.

Sales rose 14% year on year to €554.4m during the June-September quarter, while operating profit was 18% higher at €46m.

"Kemira delivered a solid quarter again and I am pleased with the robust profitability and growth,” said president and CEO Harri Kerminen.

“Organic revenue growth was 7% compared to the third quarter last year driven by increased volumes in Paper and Oil & Mining segments. Revenue was also positively affected by exchange rate fluctuations,” added Kerminen.

He said that as a result of improved demand among its customers and firm cost control, the company was after just nine months close to last year's operating profit, excluding non-recurring items.

“We estimate the whole-year operating profit, excluding non-recurring items, to be significantly higher compared to last year," said Kerminen.

However, the company added that Kemira's short-term risks and uncertainties were connected to raw material availability and prices.

It added that the introduction of the EU's Reach legislation could decrease the available raw material options and thus increase the company's raw material costs.

"Reach registration of Kemira's own products may also be more expensive than estimated, especially if we are unable to share the costs with other companies," said the producer.

($1 = €0.73)

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By: Hilde Ovrebekk
+44 20 8652 3214

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