28 July 2011 09:57 [Source: ICIS news]
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LONDON (ICIS)--Net profit at France’s Rhodia surged nearly threefold in the second quarter, it said on Thursday, as Belgium’s Solvay closed in on an August takeover of the speciality chemicals maker.
Profit for the quarter was €113m ($161m), Rhodia said, up from €43m a year earlier. The jump in profits came on the back of a 22% rise in sales, which increased to €1.62bn in the three months to June 2011, up from €1.33bn in the same period of 2010.
The company's second-quarter recurring earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 31% year on year to a record €297m, with operating profit surging by 49% to €218m, the company said. Rhodia believes that it will achieve EBIDTA of more than €1bn in 2011.
“We continue to benefit from solid levels of demand across segments and regions as well as excellent pricing power,” said Jean-Pierre Clamadieu, chairman and CEO of Rhodia.
The positive results come as Belgian plastics and chemicals producer Solvay closes in on the acquisition of Rhodia. Solvay announced its plans to acquire the company in a 14 June filing to the European Commission. The company tabled a cash offer for Rhodia shares at €31.60/share, a 50% premium over Rhodia’s closing price on 1 April.
The companies are now waiting for the European Commission to approve the bid, after which the French financial authority Autorite des Marches Financiers (AMF) will announce a closing date for the bid. Rhodia expects the AMF to set a 5 August deadline for the deal.
Rhodia has cut its debt while increasing its spending on new ventures in 2011, in line with its plans to expand while remaining profitable. Its debt pile fell by €109m during the first half of 2011, to €1.1bn, while the company plans to spend €370m on new projects in 2011, up from €270m in 2010. Key investments for the year will be directed towards high-growth markets including surfactants, guar, silica and biomass energy.
$1 = €0.70
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