US KMG Chemicals’ fiscal Q4 net income falls 65%, but sales rise 19%

13 October 2011 14:02  [Source: ICIS news]

HOUSTON (ICIS)--KMG Chemicals’ fiscal fourth-quarter net income fell 65% year on year to $1.2m (€864,000), mainly because of higher raw materials and distribution costs, as well as costs from consolidating manufacturing operations, the US specialty chemicals producer said on Thursday.

KMG’s operating income for the three months ended 31 July fell 57% year on year to $2.7m. The company warned last month to expect lower operating and net income.

KMG’s sales rose 19% year on year to $74.2m, driven by higher sales in the company's electronic chemicals and wood treatment chemicals businesses, it said.

CEO Neal Butler said the electronics chemicals business benefited from a strong semiconductor market and global price increases.

However, KMG’s price increases did not keep up with a “rapid escalation” in costs, he said. Electronic chemicals is KMG’s largest segment by sales, accounting for 54% of total sales during the quarter.

As for KMG’s outlook, Butler said he remains confident even though it is difficult to predict the direction of the economy.

Absent a global recession, KMG should see organic growth in its core electronic chemicals business in 2012 and beyond, Butler said.

At the same time, KMG will look for “additional consolidating acquisitions” in electronic chemicals and wood treating chemicals to drive growth, he added.

($1 = €0.72)

For more on KMG and other producers visit ICIS company intelligence

By: Stefan Baumgarten
+1 713 525 2653

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