25 October 2012 11:33 [Source: ICIS news]
LONDON (ICIS)--Strong growth in its consumer chemicals and specialty polymers operations helped Solvay to deliver above-expectations third-quarter financial results, despite a fall in overall sales for its Rhodia subsidiary, the Belgian chemicals company said on Thursday.
The company posted an overall third-quarter net profit increase of 2% year on year to €163m ($212m) and a 1% increase in net sales to €3.29bn, according to earnings figures released today.
Recurring earnings before interest, tax, depreciation and amortisation (REBITDA) for the specialty polymers operations of Solvay’s plastics business were up 24% year on year for the quarter to €115m, driven by a slight increase in prices and a 9% increase in volumes, with strong demand from the oil and gas, consumer and electronics sectors.
Gains achieved in the specialty polymers division were offset by a 13% REBITDA slump in the company’s vinyls business, driven primarily by “low and volatile” demand for polyvinyl chloride (PVC) in Europe, meaning that growth was flat year on year for Solvay’s plastics subsidiary. EBIT stood at €102m for the quarter.
REBITDA for consumer chemicals – a division of Solvay’s Rhodia subsidiary, acquired in September 2011 – more than doubled year on year during the quarter, driven by “exceptional” pricing conditions for its guar gum derivatives operations in India. The strong pricing led to a €40m increase in earnings for Hindustan Gum & Chemicals, Rhodia’s joint venture with India’s M P Birla Group, the company said.
Rhodia’s quarterly EBIT increased 12% year on year to €210m, despite sales and REBITDA slumps for the company’s advanced materials, polyamide materials and energy services subsidiaries.
Solvay posted strong growth for its chemicals division, with EBIT increasing by 30% year on year to €99m during the quarter, the company said. Sales growth was strongest in the company’s essential chemicals division, driven by strong demand for hydrogen peroxide and caustic soda.
Sales growth for essential chemicals was strongest in South America and Asia-Pacific, while growth was more sluggish in the Europe, Middle East and Africa (EMEA) region, where sales grew by 3% year on year during the quarter.
($1 = €0.77)
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