US Georgia Gulf Q2 net income falls 7% to $13.6m

01 August 2012 23:33  [Source: ICIS news]

HOUSTON (ICIS)--US-based vinyls producer Georgia Gulf on Wednesday announced a second quarter net income of $13.6m (€11.0m), down from $14.6m from the same time last year, but touted an improvement in the first half of 2012 over the first half of 2011.

Georgia Gulf reported second quarter sales of $867.7m, which was 4% higher than the $831.7m in sales reported in the second quarter of 2011.

In the chlorovinyls segment, second quarter net sales increased to $339.9m from the $323.7m reported in the same period of last year, while operating income fell to $34.5m from the $37.8m posted in the second quarter of 2011. After factoring in a $1.2m restructuring gain, the company said the $2.1m year-on-year decline was due to higher maintenance expenses, partially offset by an increase in resin sales volumes.

In the aromatics segment, second quarter sales were $275.5m, up from the $233.9m in sales posted in the same period of 2011, with an operating loss of $2.4m compared with an operating loss of $7.4m during the second quarter of 2011. The company attributed the smaller operating loss mainly to higher sales volumes partially offset by higher inventory holding losses.

In the building products segment, second quarter net sales were $252.4m, down from the $274.2m in net sales posted in the same period in 2011.

The segment’s operating income was $15.4m for the second quarter, compared to $16.9m during the same period in 2011. After including a restructuring gain of $500,000 in the second quarter of 2012 and a $900,000 net expense from restructuring charges and inventory, Georgia Gulf attributed a $2.9m decrease in operating income year-on-year to lower sales and higher selling, general and administrative costs, partially offset by lower distribution costs.

The company also touted the 19 July announcement that Georgia Gulf and PPG Industries, another US-based chlor-alkali producer, had agreed that PPG would separate its commodity chemicals business and merge it with Georgia Gulf.

“Our operating results for the first half of 2012 improved over the first half of 2011 as the recovery in the housing and construction markets showed modest improvement,” said company CEO Paul Carrico.

“Going forward, we see low-cost natural gas in North America remaining globally advantaged as a source of energy. This will continue to place the Gulf Coast chlorovinyls producers in a strong position to supply domestic and export customers,” Carrico said.

“Our recently announced merger with PPG’s commodity chemicals business will create a chemicals and building products leader that is very well positioned to benefit from this cost advantage and expanding global demand for our products,” Carrico said.

($1 = €0.81)

Follow Ken Fountain on Twitter (@ICIS_Ken)

By: Ken Fountain

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