UpdateEvonik remains optimistic despite tough business conditions

08 August 2012 11:31  [Source: ICIS news]

(adds CEO comment and segment data)

LONDON (ICIS)--Evonik Industries’ chairman on Wednesday said the Germany-based producer remains optimistic about its specialty chemicals business despite difficult trading conditions.

“Our operating business is still doing well. We are on course in waters that are getting rougher,” said Klaus Engel, chairman of the executive board of Evonik.

“Although business conditions are getting tougher and the risks are increasing, we are still optimistic about our specialty chemicals business,” he added.

Engel noted, however, that it would be better if further deterioration in the economy could be avoided; “… we do not need a further economic downtick,” he said.

The chairman’s comments came as the company released financial data for the second quarter and first half of 2012.

Evonik’s net profit surged to €264m ($326m) in the second quarter of this year, compared with €94m in the same period in 2011.

The second-quarter 2011 net profit figure was impacted by high one-off expenses in connection with divestments. The company’s adjusted net profit, after taking into account these expenses, fell by 33% year on year to €270m, Evonik said.

The company’s overall sales fell by 9% year on year to €3.48bn, while adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) were down by 7% at €674m, the firm said.

In Evonik’s Specialty Materials segment, comprising its Performance Polymers and Advanced Intermediates business units, sales were €1.27bn in the second quarter of 2012, up 3% year on year, as higher selling prices and positive currency effects offset the reduction in volumes resulting from lower demand and a production shortfall.

The segment’s EBITDA during the quarter rose 9% year on year to €239m, it added.

For the first half of 2012, the company’s net profit rose by 2% year on year to €533m, while sales were down by 8% at €6.94bn, it said.

“After adjustment for non-operating effects, adjusted net income was €602m, 21% lower than in H1 2011 [€765m], when the comparable figure still included a significant earnings contribution from the carbon black business [which was divested in July last year],” Evonik added.

Looking ahead, the company said risks relating to the European sovereign debt crisis are now higher.

“First signs of a drop in demand are already evident in Europe. In addition, growth prospects have deteriorated in Europe and some emerging markets,” it said.

“Overall, Evonik expects to report slightly higher sales for fiscal 2012. The operating results will probably be in line with or slightly above the excellent 2011 level,” Evonik added.

 ($1 = €0.81)

Additional reporting by Nurluqman Suratman


By: Franco Capaldo
+44 (0)20 8652 3214



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