02 August 2011 15:20 [Source: ICIS news]
LONDON (ICIS)--Following on from a strong first quarter, French specialty chemicals firm Arkema has continued to see healthy sales growth in the second quarter of 2011 despite a challenging environment for key petrochemical markets such as vinyls and acrylic monomer, the company said on Tuesday.
The company posted a net profit growth of 61% compared with the same period last year, largely on the back of higher sales prices.
“Our repositioning in buoyant markets and the contribution of growth projects, in particular the production units recently opened in China and innovation in sustainable development solutions, are key factors of success,” said Thierry Le Henaff, the company's chairman and CEO.
Earnings before interest, tax, depreciation and amortisation (EBITDA) reached €320m ($457m) for the second quarter of 2011 compared with €241m in the same period of 2010, but in a statement accompanying the release of the results the company pointed out that this improvement “owes little to acrylic monomers and vinyl products”.
The vinyls segment only contributed €1m of EBITDA growth in the second quarter of 2011, while acrylic monomer growth was firmer at €12m.
In comparison, year-on-year growth for the company’s industrial chemicals sector outside of these two markets came in at €61m. In total, 80% of the company’s EBITDA growth for the second quarter of 2011 was outside acrylic monomers or vinyls.
Industrial chemicals sales for the second quarter of 2011 reached €961m, a growth of 12.5%, largely supported by significant price increases implemented in most business lines, and, to a lesser extent, by growing volumes, said Arkema.
Sales for vinyl products stood at €303m for the second quarter of 2011, up €5m from the same period last year. Volumes actually decreased compared with last year, said the company, as they were limited by a turnaround in Lavera and by weaker demand in June related to the announcement of a drop in ethylene prices.
Nevertheless, high margins combined with a tight supply/demand dynamic throughout the first half of 2011 did help support the vinyls and acrylates segments, the latter in particular, which have struggled in Europe due to a weaker construction industry this year.
Additionally, as the EU's 2020 deadline to switch mercury chlor-alkali production to the more energy-efficient membrane technology draws ever closer, European polyvinyl chloride (PVC) players continue to struggle with poor economics.
Accordingly, Arkema subsidiary Alphacan finalised the divestment of its French PVC pipes business in June.
($1 = €0.70)
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