US HB Fuller Q2 income plunges 92% despite revenue growth

26 June 2012 06:54  [Source: ICIS news]

SINGAPORE (ICIS)--HB Fuller’s second-quarter net income fell by 92% year on year to $1.94m (€1.55m), despite a sizeable growth in net revenue, the US-based adhesives and coatings manufacturer said on Tuesday.

Excluding the Latin America’s paint business the net revenue of the company in the second quarter, which ended on 2 June 2012, rose by 43% year on year to $527m.

“Higher average selling prices and acquisitions positively impacted net revenue growth …,” it said in a statement. 

However, reported gross margin deteriorated 210 basis points compared to the previous year, it said.

“The primary cause of the gross margin deterioration was the addition of the Forbo adhesives business, which currently generates lower gross profit margins relative to the legacy business,” the statement added.

"In addition, gross profit margin was negatively impacted by the fair value inventory step-up related to the Forbo transaction and the elimination of the paints business from continuing operations," it said.

HB Fuller completed the acquisition of Swiss flooring group Forbo in March this year.

($1 = €0.80)

By: Joey Lau

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