Mexico Alpek Q4 income drops 60% despite volume growth

12 February 2013 20:03  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--Alpek’s 2012 Q4 net income fell by about 60% year on year to $30m (€23m), despite a 4% increase in sales volumes during the period, the Mexico-based polyethylene terephthalate (PET) producer said on Tuesday.

A 12% decrease in operating income as well as one-time financing expenses and non-cash foreign exchange losses impacted results, the company said.

In addition, soft global demand and pressure in Asian, European and South American markets due to new production capacity in China affected margins, Alpek said.

Accumulated net income for the year stood at $277m, down by about 14% from $322m recorded for the previous year.

Consolidated revenues for the quarter stood at $1.67bn, down by nearly 3% from $1.72bn a year earlier, while accumulated net sales for 2012 decreased by about 1% to $7.27bn.

By segment, Q4 sales revenues of polyester and polyester products totalled $1.30bn, a drop of about 4% year on year, the company said.

Revenues for Alpek’s plastics and chemicals segment, which produces expandable polystyrene (EPS), polypropylene (PP), caprolactam and other products, stood at $373m, up by about 2% compared to the fourth quarter in 2011.

Alpek, a subsidiary of Grupo Alfa, said both segments were impacted by lower prices resulting from this year’s decline in oil and petrochemical feedstock prices.

Average polyester prices in the quarter were down by about 5.9% year on year, while average plastics and chemicals prices were down by about 7.7%.

Despite a drop in Q4 revenue and income, consolidated sales volume were about 4% higher than the previous year’s fourth quarter.

Sales volumes of polyester increased by about 2% year on year, Alpek said, notwithstanding continued weakness in export markets and the temporary effects of Hurricane Sandy.

The company’s plastics and chemicals segment volume increased by 11% during the fourth quarter, boosted by robust demand in the PP business, Alpek said.

Alpek owns DAK chemicals.

Alpek's parent company, Grupo Alfa, reported Q4 revenues of $3.69bn, up about 4% year on year. Q4 net income was $115m, up about 60% year on year.

($1 = €0.75)

By: Simon West

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