09 November 2011 18:18 [Source: ICIS news]
(recast paragraph 2 without percentage change)
HOUSTON (ICIS)--Despite a third quarter operating loss of $39m (€28m) for its polyethylene (PE) segment, Canada's NOVA chemicals is confident in the future health of that sector, the company's chief executive said on Wednesday.
For the third quarter of 2011, NOVA's PE business fell from an operating profit of $54m in the third quarter of 2010, based on higher raw material costs and consistent sales volumes, the company said.
PE operating profits for the first nine months of 2011 fell by 38% to $110m, from $176m during the same period in 2010.
"Over the last few months, as market prices have come off of earlier peaks, we have seen polyethylene prices move down more rapidly than ethylene declined," said Randy Woelfel, chief executive officer. "That has certainly compressed polyethylene margins to a place … that doesn't make any of us happy."
The PE market was reacting to a variety of outside influences, including global economic concerns, Woelfel said.
"When you step back from that … we feel that the fundamentals of the business are still structurally sound, and that we are actually in pretty decent shape as we finish 2011 and move into 2012," he said.
Woelfel cited American Chemistry Council statistics that suggest that domestic PE sales in the US and Canada are up by 1.5% from 2010.
"Our industry may be growing more slowly, but it is still growing," he said.
As a whole, NOVA Chemicals nearly tripled its 2011 third-quarter profit, to $150m from $58m in the same period a year ago, driven by a strong performance in its core olefins business.
The olefins business improved because of higher sales prices and volumes, the company said.
($1 = €0.72)
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