04 August 2011 18:05 [Source: ICIS news]
HOUSTON (ICIS)--Adverse currency movements on the back of the ?xml:namespace>
Huntsman's chief financial officer Kimo Esplin said investors seeking a safe haven bought Swiss francs, thus driving up the value of that currency by 20% vis-a-vis the US dollar and by 10% vis-a-vis the euro in the past year.
Huntsman sells most of its Swiss-based production in euros. About 10% of Huntsman’s overall fixed costs are in Swiss francs.
The stronger Swiss franc, in turn, cost Huntsman a total of $17m (€12m) in lost second-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) in its advanced materials and textiles effects business, compared with the same quarter a year ago, Esplin told analysts during the company’s second-quarter results conference call.
“We are refining our plans to address this issue,” he added.
Meanwhile, CEO Peter Huntsman ruled out an analyst’s suggestion that the company could sell the advanced materials and textiles effects businesses to a private equity firm or another chemical producer.
Rather, Huntsman expects both businesses to improve over the next quarters, he said.
“I believe those businesses are as profitable in our hands as they would be in anybody else’s hand,” he added.
Second-quarter adjusted EBITDA in Huntsman’s advanced materials segment fell 39% year on year to $31m.
In textile effects, Huntsman recorded a second-quarter adjusted EBIDA loss of $7m, compared with a profit of $8m in the same period a year ago.
Advanced materials and textile effects accounted for about 20% of Huntsman’s overall second-quarter sales of $2.93bn.
Huntsman stock was down 21% at $14.19 on Thursday morning.
($1 = €0.70)
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