Kemira swings to a net loss of €41m on restructuring costs

06 February 2013 13:46  [Source: ICIS news]

LONDON (ICIS)--Kemira reported a fourth-quarter 2012 net loss of €40.6m ($54.9m) from a net profit of €37.8m in the same period the year before, despite increased revenues and steady operative earnings before interest and taxes (EBIT), as a result of restructuring costs, the Finland-based water chemistry company said on Wednesday.

The company incurred €31m in charges for its efficiency restructuring programme, €8m of which took the form of asset writedowns, and €23m of which was for severance payments and external services, the company said. The total cost of the programme for the second half of 2012 was €71m, Kemira added.

The company’s revenues for the quarter increased by 3% year on year to €558.5m, while operative EBIT was €33.7m compared with €34.3m during the fourth quarter of 2011.

"Despite our ongoing restructuring initiatives, we managed to maintain the fourth quarter revenue and operative EBIT at last year's level, and reached our targets set for 2012. This is an encouraging achievement, considering the stagnating markets in which we are operating,” said Kemira president Wolfgang Buchele.

Several of the markets Kemira operates in shifted radically in 2012, the company said, with “major global competitors” entering the water treatment and oil and mining sectors, either through acquisition or strategic refocus.

The company’s performance was also impacted by a slowdown in the titanium dioxide market during the year, leading to a deterioration of the performance of Sachtleben, a titanium dioxide-focused joint venture between Kemira and US specialty chemicals company Rockwood Holdings.

The deteriorating performance of Sachtleben had a “substantial” impact on the company’s earnings per share, according to the company.

Kemira’s restructuring programme is targeting €60m in cost savings by 2014, and will lead to the loss of up to 600 jobs. Redundancies will account for 50% of the programme’s savings, with the remainder to be found through manufacturing network consolidation and efficiency savings.

The company’s net profit for 2012 shrank to €21.5m compared with €140.3m in 2011, despite a slight increase in sales and stable EBIT.

Sales volumes for the company’s ChemSolution division were steady year on year, while paper segment revenues grew by 5% to €1bn, excluding the sale of a Canadian hydrogen peroxide unit to Evonik in late-2011.

The company predicted that its revenues in local currency terms would be 0-5% higher in 2013 than in 2012, excluding divestments, and that its operating EBIT would be over 15% higher year on year.

($1 = €0.74)


By: Tom Brown
+44 208 652 3214



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