Albemarle eyes better profitability in second half of 2013, says CEO

18 April 2013 17:43  [Source: ICIS news]

HOUSTON (ICIS)--Albemarle expects its profitability to increase in the second half of 2013, after declining in the first quarter and the weak current second quarter, the CEO of the US-based specialty chemicals and catalysts firm said on Thursday.

“But the increase [in profitability] may not be as robust as we had originally expected,” Luke Kissam told analysts during Albemarle’s 2013 first-quarter results conference call.

For the 2013 first quarter, Albemarle reported net income down nearly 27% as sales fell 10% to $642m (€494m).

Kissam said that demand for industrial bromides is expected to remain strong, boding well for Albemarle’s fine chemistry business.

As for catalysts, Albemarle continues to monitor the timing of customer refining turnarounds and plant start-ups, “and there is always a danger that some [catalyst sales] volumes will slide into 2014,” Kissam said.

Meanwhile, in Albemarle’s polymer solutions business uncertainty over electronic demand is likely to persist through the first half of 2013. In addition, the European demand outlook for construction and automotive remains weak, Kissam said.

Albemarle expects its overall second-quarter performance to be similar to the first quarter, with “polymers being weaker, fine chemistry being a little stronger, and catalysts being essentially flat,” Kissam said.

For the full year of 2013, Albemarle’s earnings growth expectation is now at a “range of negative 4% to [positive] 3%” – compared with Albemarle’s initial forecast, from January, of year-on-year earnings growth in the range of 0%-6%.

Given headwinds from foreign exchange rates, mainly from the Japanese yen, and a second quarter that will likely be weaker than first expected, “today it appears that we will likely be at the low end of that range, excluding any impact of [Albemarle’s share] buy-back programme,” Kissam said.

“We continue to believe that 2013 will be a year during which we continue building a stronger foundation for sustainable long-term growth,” he added.

Albemarle’s share price was down 4% to $57.84/share at 11:46 New York time.

Additional reporting by Al Greenwood

($1 = €0.77)

By: Stefan Baumgarten
+1 713 525 2653

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