28 February 2012 11:23 [Source: ICIS news]
LEVERKUSEN, Germany (ICIS)--Bayer MaterialScience performed below expectations in the fourth quarter and in the whole of 2011, German chemical producer Bayer's CEO said on Tuesday.
Marijn Dekkers reported that Bayer MaterialScience, Bayer's business with high-performance plastics, saw earnings fall because raw material cost increases could not be passed on to customers in the second half of the year.
Higher operating costs were also incurred, including those for commissioning a toluene di-isocyanate (TDI) plant in ?xml:namespace>
“The MaterialScience business unfortunately performed below expectations in 2011,” said Dekkers.
“Although sales rose by 8% [on a currency-adjusted basis] compared with 2010, to €10.8bn, EBITDA [earnings before interest, tax, depreciation and amortisation] before special items was down by nearly 14% to €1.17bn. As a result, the underlying EBITDA margin for 2011 receded by a substantial 2.6 percentage points,” he added.
Within the MaterialScience segment, sales from its business unit with raw material for foams (polyurethanes) in 2011 improved by 9.5% year on year, high-tech plastics (polycarbonates) improved by 5.6% year on year, and raw material coatings, adhesives and specialities were up by 4.5%. Sales in the segment's industrial operations business achieved year-on-year sales growth of 22%.
Dekkers said that although it was a positive factor that sales had increased, the company scarcely achieved any volume increases.
He added that the segment had also felt the negative effects of the economic uncertainty in the fourth quarter.
In the fourth quarter, sales at the MaterialScience business grew by 0.5% to €2.60bn, while EBITDA fell by 49.5% to €150m ($200m).
Earlier on Tuesday, Bayer reported that it swung to an overall fourth-quarter net profit of €397m, from a net loss of €145m in the same period a year earlier, and posted a 2% year-on-year rise in sales to €9.19bn
EBITDA decreased by 6.3% to €1.42bn compared with the same period in 2010 because of a decline in earnings from the MaterialScience segment, said Bayer.
“Overall business development in the fourth quarter showed a mixed picture,” said company CFO Werner Baumann.
EBITDA for the fourth quarter at Bayer’s Healthcare and CropScience businesses improved by 13% and 2.9% respectively.
The company’s net profit in 2011 grew by 89.9% year on year to €2.47bn, while sales rose by 4.1% to €36.5bn, it said. EBITDA at its Healthcare segment in 2011 grew by 9.4% to €4.50bn, and its CropScience unit earnings surged to €1.22bn, from €767m in 2010, Baumann said.
The group’s total EBITDA in 2011 grew by 10.1% year on year to €6.92bn, it added.
($1 = €0.75)
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections