Rockwood Q4 net income falls 66% on performance additives, Ti02

19 February 2013 13:47  [Source: ICIS news]

LONDON (ICIS)--Rockwood Holdings’ net income fell by 66% year on year to $21.2m (€15.9m) in the fourth quarter of 2012, as a result of weaker earnings for its performance additives and titanium dioxide (Ti02) business segments, the US-based specialty chemicals company said on Tuesday.

The company’s performance additives business was negatively impacted during the period as a result of lower oil and natural gas drilling activity in North America, the company said. Weak Ti02 demand was also cited as a key driver behind a 19% year-on-year drop in net income during the third quarter of 2012.

“The results for our performance additives segment were negatively impacted by lower oil and natural gas drilling activity in North America. Our TiO2 business did not perform well due to lower prices and higher raw material costs,” said Rockwood CEO Seifi Ghasemi.

Net sales for the quarter were up slightly year on year, at $829m compared to $814.4m in the fourth quarter of 2011, Rockwood added. Net income for 2012 as a whole was down by 7% at $383.5m year on year, and net sales fell by 5% to $3.5bn during the same period, Rockwood added.

Earnings before interest, tax, depreciation and amortisation (EBITDA) for the company’s Ti02 operations dropped by 90% year on year to $6.7m, despite a 14% increase in sales over the period to $223m, as a result of lower production levels to reduce inventory and lower selling prices, according to Rockwood.

The company announced in October 2012 that it intended to run its Ti02 operations at 65% capacity during the fourth quarter of the year.

Performance additives EBITDA fell by 36% year on year during the quarter to $17m, because of lower sales volumes, and lower production levels implemented to reduce inventory. In addition to North American demand issues, volumes were also impacted by lower coatings and construction volumes in Europe, Rockwood added.

Results were more positive during the quarter for surface treatments, which marked a 7% uptick in EBITDA year on year to $38.6m during the quarter on the back of lower costs and higher prices; and for lithium operations, which marked a 9% increase in EBITDA to $44m over the period as a result of higher sales.

Advanced ceramics EBITDA was up by 4% to $38.7m on the back of higher medical ceramic volumes, according to the company.

Rockwood is currently looking at options for parts of its Ti02 business, following the acquisition last week of an additional 39% stake in Sachtleben, the Germany-based Ti02 specialist that the company had run as a joint venture with Finnish water chemistry company Kemira.

Ghasemi said at the time that Rockwood had paid €97.5m for the additional stake in the loss-making company to give it greater control in considering different strategies for the company, with a decision expected to be taken by the end of the year.

($1 = €0.75)

By: Tom Brown
+44 208 652 3214

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