US Albemarle expects Q4 results to decline on polymer weakness

18 October 2012 17:05  [Source: ICIS news]

HOUSTON (ICIS)--Albemarle expects its results to decline in the fourth quarter, compared with the third, mainly because of continued weakness in its polymer solutions business, the CEO of the US-based specialty chemicals and catalysts firm said on Thursday.

“We currently expect the fourth quarter to be weaker than third-quarter results,” Luke Kissam said in briefing analysts on Ablemarle’s third quarter, which saw year-on-year and sequential declines in both net income and sales.

Albermarle is seeing nothing in the economic indicators or its order book that would indicate an improvement in polymer solutions markets in the fourth quarter, Kissam said.

Polymer solutions will likely see soft end market demand and low operating rates at least through the Chinese New Year, he added.

“The next demand sign-post is expected to occur post-Chinese New Year, when customer order patterns and discussions will give us a more confident view on how 2013 is likely to shape up,” he said.

Albemarle’s polymer solutions business supplies fire retardants to the electronic, textiles, furniture, automobile and other sectors. It also produces antioxidants for fuels and lubricants, and curatives for elastomers, coatings and specialty adhesives.

Polymers solution's third-quarter segment income was down 20% year on year to $44m (€33m) as segment sales fell by 11% to $217m. The segment contributed one third to Albermarle’s overall third-quarter sales of $661m.

Weakness in polymer solutions, but also in fine chemistry, will more than offset an improvement Albemarle expects to see in its catalysts segment in the fourth quarter, Kissam said.

“While we expect to grow our profitability in all three segments in 2013, if economic uncertainty continues, we are prepared to take appropriate steps to ensure the company's financial strength and future growth,” Kissam said.

Those steps would include cost cuts and savings across all three segments, he said.

Kissam also said that Albemarle is still looking at acquisition opportunities in the current slow economy.

However, Albemarle would be taking a “measured approach” to acquisitions. “I am not going to do an acquisition just because interest rates are low and we want to do one,” he said.

($1 = €0.76)

Paul Hodges studies key influences shaping the chemical industry in his Chemicals and the Economy Blog

By: Stefan Baumgarten
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