09 November 2011 10:40 [Source: ICIS news]
(Adds context and outlook, paragraphs 10-15)
LONDON (ICIS)--Arkema’s adjusted net profit in the third quarter edged up by 1.56% year on year to €130m ($181m) as stronger product prices helped offset spikes in raw material costs and a one-off charge, the French specialty chemicals firm said on Wednesday.
The third-quarter results included a non-recurring charge of €27m related to the acquisition of Total's specialty resins businesses, the company said.
Arkema’s revenues in the July-September period grew by 18.6% year on year to €1.85bn, while earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 6.91% to €263m, the company said in a statement.
The company’s financial performance for the quarter was within expectations, said Thierry le Henaff, chairman and CEO of Arkema.
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“The end of [the] third quarter saw a growing caution by certain customers in their inventory management, reflecting the current macroeconomic conditions,” he added.
The company’s actual net profit fell 16% year on year to €109m in the third quarter, bringing its nine-month profit to €444m, up 53.6% year on year.
Adjusted net income for January-September 2011 stood at €474m, 65.7% higher compared with the previous corresponding period, Arkema said.
Its overall sales grew by 19.7% year on year to €5.36bn in the same period, while EBITDA surged by 39.4% to €474m, it said.
The company said on the strength of its internal development momentum and the performance achieved over the first nine months, 2011 will be significantly above 2010, with an EBITDA that should exceed €1bn.
However, the fourth quarter will reflect the traditional end-of-year seasonal weakness, which was less pronounced last year, the company said.
“This seasonality should be amplified by the growing caution of customers in managing their year-end inventory levels in the light of the more uncertain macroeconomic environment and lower growth assumptions in the
“Additionally, the fourth quarter will also include several maintenance turnarounds scheduled at Arkema plants in acrylics, fluorogases, and fluorinated polymers,” it added.
Investment bank JP Morgan Cazenove said despite Arkema’s concerns over a possible slower growth environment in 2012, Arkema's business climate remains relatively robust.
“In addition, further and current fixed cost savings, commissioning of two new Chinese plants, and an extra six months’ contribution from the acquisition of Total’s resins business [are] helping [Arkema in] the second half of 2011, and the first half of 2012,” the bank added.
($1 = €0.72)
For more on Arkema visit ICIS company intelligence
Additional reporting by Nurluqman Suratman
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