27 January 2012 01:32 [Source: ICIS news]
HOUSTON (ICIS)--Earnings for INEOS’s chemical business fell slightly in the fourth quarter because of delayed cracker restarts and market conditions in China and the EU, the Swiss-headquartered company said on Thursday.
INEOS said that based on unaudited preliminary management information, the company’s fourth-quarter earnings before interest, taxes, depreciation and amortisation (EBITDA) fell to €220m ($289m) from €223m in the fourth quarter of 2010.
Full-year EBITDA for 2011 was €1.744bn, the company said.
Both the fourth-quarter and full-year earnings were impacted by a €30m adjustment caused by delayed turnarounds at its Koln cracker in Germany and its Grangemouth cracker in the UK.
INEOS said the Grangemouth gas cracker “incurred significant feedstock and utilities losses due to operational difficulties with the feedstock supply” while the overhaul at Koln had other issues that resulted in major losses.
Also, the fourth-quarter market environment was problematic, the producer said.
“Businesses such as nitriles and phenol were directly impacted by the government imposed fiscal restraint in China, which led to a decline in Asian demand and declining product prices” INEOS said.
In Europe, many buyers sought to destock inventories, leading to weakening demand and reduced operating rates, it said.
Fourth-quarter trading conditions were better in North America, INEOS said, adding that oxide and oligomers “also held up well in the quarter”.
INEOS said the trading environment has substantially improved at the start of 2012.
In Europe, “all plants are running well after coming back from Q4 turnarounds and off take has picked up after heavy destocking at the year end,” INEOS said. “Substantial sales price increases are being targeted for February.”
All four of INEOS’s chemical intermediates businesses have seen improved conditions, INEOS said, with a 20% rise in phenol sales from December, while nitriles plant operating rates have risen to 90% in January from around 60% in the fourth quarter.
“Across the entire business the four-week moving average of weekly order volumes in early January is the highest it has been over the last five years,” INEOS said.
The company plans to issue a more detailed trading statement in February.
($1 = €0.76)
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