02 March 2011 15:31 [Source: ICIS news]
(adds further financial detail and quotes from CEO)
PARIS (ICIS)--Arkema swung to a net profit of €58m ($79.5m) in the fourth quarter of 2010, against a €20m loss in the previous corresponding period, as the group managed to pass on higher raw material costs, the French specialty chemicals firm said on Wednesday.
Sales for the three months ending in December 2010 grew 32.4% to €1.43bn from €1.08bn in the previous corresponding period, driven by strong demand in ?xml:namespace>
Sales also grew on the back of a gradual recovery in demand in North America and the start-up of the group’s HFC-125 fluorogas production plant in Changshu, near
Its earnings before interest, tax, depreciation and amortisation (EBITDA) for the fourth quarter more than doubled to €166m, largely due to strong demand in Arkema’s industrial chemicals and performance products segments.
“We have boosted our presence in emerging countries, in particular in
“We are benefiting from launching a large number of solutions for fast-growing markets related to sustainable development, including new energies and bioplastics. Finally, our cost structure has been reduced significantly, which enabled us to fully benefit from the volume recovery in 2010,” he added.
Arkema’s industrial chemicals business, which accounts for 53% of group sales, had a 48.6% surge in sales during the fourth quarter to €786m, with EBITDA soaring 76.6% year on year to €136m. The segment benefited from methyl methacrylate (MMA)/polymethyl methacrylate (PMMA) restructuring in Europe, the new fluorogas unit in Asia and the acquisition of acrylic activities in
“Beyond the more favourable economic environment and the recovery in unit margins for acrylic monomers, this significant [earnings] increase reflects the progress achieved by all of the segment’s business units,” Le Henaff said, speaking at Arkema’s 2010 full-year results conference in
Within its performance products business, sales increased by 23.4% year on year to €390m in the fourth quarter, with an EBITDA of €37m, up 27.6% year on year, as traditional end-markets, such as automotive, oil and gas, packaging, and cable and plastics, benefited from good demand recovery.
Its vinyls products segment, meanwhile, reduced its fourth-quarter loss in EBITDA to €10m from €18m in the corresponding period in 2009, with sales rising 8.1% year on year to €234m as volumes grew slightly in the construction market.
Le Henaff added that the segment’s earnings had been affected in the fourth quarter by strikes related to pensions reforms in
“This improvement reflected continuing productivity gains, which remain the priority for this segment, and an improvement in the vinyl compounds activity thanks to repositioning on higher-added-value markets,” Le Henaff said.
For the whole of 2010, Arkema posted a net profit of €347m against a net loss of €172m in 2009, with sales up 32.9% year on year to €5.91bn, as volumes rose by 11% compared with 2009, the company said.
EBITDA in 2010 surged to €790m from €310m in the previous year, Arkema said.
Le Henaff said Arkema had achieved by far its best historical performance in 2010, well above pre-crisis levels, following five years of in-depth transformation for the group. Furthermore, with a 13.4% EBITDA margin, the group exceeded the 12% target it had set at the time of its spin-off from oil major Total in 2006, when its EBITDA margin was just 6%.
The CEO also said that due to the group’s significant recovery, Arkema’s board of directors has decided to propose to the next Annual General Meeting due in May a dividend payment of €1.0/share, versus €0.60/share in 2009.
($1 = €0.73)
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