US-based A Schulman reports 30% increase in Q2 net income

08 April 2013 22:27  [Source: ICIS news]

HOUSTON (ICIS)--A Schulman posted a nearly 30% year-on-year rise in Q2 net income thanks to increased net sales and a benefit for US and foreign income taxes, the company said on Monday.

Net income for the second quarter to 28 February 2013 was $11.8m (€9.1m) compared with $9.1m from Q2 2012.

Net sales for the second quarter were $522m, up from $496m in the same period a year earlier.

But A Schulman received a tax benefit in Q2 2013 of about $4.4m that helped the company’s bottom line compared with last year’s nearly $3m tax charge in the same period.

For the first two fiscal quarters of 2013, the company’s net income has increased nearly 4% to $23.6m from $22.7m for the same periods a year earlier.

Joseph Gingo, CEO of the US-based plastic compounds and resins maker, said Q2 2013 was the first quarter “in quite some time” where A Schulman’s Americas and Asia Pacific divisions could not make up for softness in its Europe, Middle East and Africa segment.

A Schulman has plans to consolidate its two manufacturing facilities in Brazil into one new plant by the end of Q1 2014 and will continue to look at ways to reduce administrative expenses to weather the weakening economic conditions, the company said.

Despite not being encouraged by the current global economic climate, Gingo pronounced his company’s balance sheet and liquidity as strong and reiterated his company’s interest in acquiring specialty chemicals producer Ferro.

In late March, A Schulman announced it had hired investment bank Moelis & Co to advise it on its hostile bid for Ferro.

Earlier in the month, the company bid $6.50/share to acquire Ferro, but the US-based specialty chemical maker rejected the bid. The offer valued Ferro at $855m, including an equity value of $563m.

“We intend to transform A Schulman beyond plastics into a premier specialty chemical organisation,” Gingo said on Monday. “We believe our offer for Ferro merits serious consideration, and we continue to engage Ferro shareholders in hopes that we can enter into mutually beneficial conversations with their board.”

($1 = €0.77)

Additional reporting by Stefan Baumgarten and Will Conroy

By: Jeremy Pafford
+1 713 525 2653

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