Rubber margin erosion takes toll on Q2 net profit at Poland's Synthos

31 August 2012 12:20  [Source: ICIS news]

LONDON (ICIS)--Second-quarter net profit at Poland's Synthos sank 48% year on year to zlotych (Zl) 117m ($35m, €28m) from Zl 225m as its synthetic rubber division faced margin squeezes on tougher markets, the company said on Friday.

Sales revenues rose 22% year on year to Zl 1.63bn from Zl 1.34bn, Synthos, Europe's second largest styrene butadiene rubber (SBR) and butadiene rubber (BR) producer added.

“While the Q2 figures show the first signs of margin erosion in the rubber segment (rubber represented 65% of the unadjusted and 76% of the adjusted Q2 consolidated EBITDA [earnings before interest, tax, depreciation and amortisation]), we expect the headwinds to intensify in Q3 when the full effect of the butadiene and SBR price slump is accounted for (prices came down more rapidly in June),” analyst Piotr Drozd at Prague-based investment bank WOOD & Company wrote in a note to investors.

The rubber segment’s EBITDA margins eroded to 17.7% in the second quarter from 22% in the first quarter if this year and from 33.8% in the second quarter of last year, Drozd noted.

The styrenics segment fared better in the second quarter with the EBITDA margin up from 2.5% a year ago to 4.9%,  but it experienced an EBITDA contraction against the first quarter of this year, falling to Zl 25m from Zl 40m, he added.

($1 = Zl 3.35, €1 = Zl 4.19)


By: Will Conroy
+44 20 8652 3214



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