Depressed European tyre sales take toll on Poland’s Synthos: bank

05 March 2013 11:39  [Source: ICIS news]

LONDON (ICIS)--Depressed European car and tyre sales and poor emulsion styrene butadiene rubber (E-SBR) demand continue to create earnings pressure for Polish major synthetic rubber producer Synthos, an investment bank said on Tuesday.

However, the bank – Prague-based WOOD & Company – acknowledged signs of first-quarter improvement in the company’s polybutadiene rubber (PBR) performance and rebounding Chinese butadiene prices.

After analysing consolidated 2012 figures from Synthos, an analyst at the bank, Piotr Drozd, said, “the final quarter of 2012 yet again reflected the difficult operating environment Synthos was up against during the second half of 2012”.

“The company’s core synthetic rubber segment saw continued margin pressure in the fourth quarter, with segment EBITDA [earnings before interest, tax, depreciation and amortisation] margins easing to 12.7% from 13.4% in the third quarter, and 21.8% in the fourth quarter of 2011,” he added.

Poor synthetic rubber marginality affected Synthos throughout 2012, Drozd said.

Despite a 19.5% increase in the rubber and latex segment’s revenues year on year to zloty (Zl) 3.9bn ($1.2bn, €0.9bn) in 2012, rubber and latex EBITDA dropped by 26.5% year on year, he added.

“Styrenics, representing 12% of Synthos’s 2012 EBITDA, registered a margin rebound [in the fourth quarter], however, to 6.0% on the EBITDA line versus 3.8% in the third quarter and break-even levels in Q4 last year,” Drozd noted.

($1 = €0.77, $1 = Zl 3.18, €1 = Zl 4.14)

By: Will Conroy
+44 20 8652 3214

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