02 August 2012 22:31 [Source: ICIS news]
HOUSTON (ICIS)--TPC Group's second-quarter net income slumped by 90% to $3.4m (€2.79m) from $34.3m a year earlier, the US butadiene (BD) producer said on Thursday, blaming the decline on the negative impact of BD price changes and lower sales volume.
Gross profit for the quarter was $68.4m, down by 41% from $115.7m in the second quarter of 2011, the company said.
The drop reflected a $45.5m reduction in the company’s C4 processing segment gross profit of $45.5m and a reduction in the performance products segment gross profit of $1.8m, TPC said.
BD is extracted from crude C4, which is produced at olefins plants.
The lower C4 processing gross profit primarily reflected the year-over-year negative impact from the changes in the price of BD between the time crude C4 was purchased and the finished BD was sold, the group said
BD pricing is sensitive to short-term supply and demand imbalances, and can create significant volatility in its earnings, TPC added.
The company's second-quarter revenue was $690m, down by 13% from $793m in the second quarter of 2011.
($1 = €0.82)
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