09 April 2013 22:58 [Source: ICIS news]
HOUSTON (ICIS)--A Schulman is considering another round of cost cutting in Europe because of a new wave of uncertainty that is hitting the region, the company's CEO said on Tuesday.
Europe makes up about 65% of the revenue of A Schulman, the company said.
Since 2010, the US-based compounder has conducted a series of cost-cutting programmes in Europe, said Joseph Gingo, the CEO of A Schulman.
Gingo made his comments during a conference call about the company's earnings during its fiscal second quarter, which ended on 28 February.
A Schulman pursued those earlier cost-cutting programmes to compensate for the weak economy in Europe, Gingo said.
Stability then returned, giving A Schuman a better feel for the order patterns of its customers in Europe, he said.
However, customers began de-stocking in December, he said. January was strong, but February was very disappointing, he said.
"We've seen the uncertainty creep back in, and people are now again uncomfortable with what's happening. Personally, I believe that will settle out, but it's going to take a while," Gingo said.
For March, the market has been soft, Gingo said. It is unclear if it is deteriorating further, but it certainly is not increasing, he said.
By region, Europe, Middle East and Africa (EMEA) reported a Q2 segment operating income of $11.5m (€8.9m), down about 25% from $15.3m reported for the same time last year, A Schulman said.
For the Americas, segment operating income was $5.85m, up about 10% from $5.34m for the same time last year, A Schulman said. Asia Pacific was $2.21m, down about 13% from $2.53m.
($1 = €0.77)
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