23 April 2013 15:10 [Source: ICIS news]
LONDON (ICIS)--Kemira announced on Tuesday plans to increase annual revenues by up to 23% by 2016 and that its first quarter profit fell by 91% year on year, primarily due to a writedown from the sale of its stake in titanium oxide (Ti02) business Sachtleben.
The company, which posted €2.8m ($3.6m) in net profit for the quarter, is looking to increase its annual revenues to €2.6-2.7bn by 2016 from €2.2bn in 2012, through increased research and development spending, efficiency savings and emerging market expansion.
The company also announced that segment management for its paper division will move to Hong Kong as of 1 September this year.
Kemira is also looking to increase its earnings before interest, taxes, depreciation and amortisation (EBITDA) margin to 15% by 2016.
Revenues for the first quarter of the year were €560.9m, a 3% year-on-year increase, while earnings before interest and taxation (EBIT) increased 9% to €44.2m during the quarter, which the company attributed to higher sales volumes, and €9m in efficiency savings.
Profits during the quarter were impacted by a €23m writedown from the sale of its 37% stake in Sachtleben to joint venture partner Rockwood Holdings, for €97.5m. Kemira had identified the Ti02 specialist as a “substantial” drain on its earnings per share for the fourth quarter of 2012.
Rockwood’s motivation for upping its stake in the loss-making company was to give it greater flexibility in exploring options for the business, including a possible sale.
The company’s ChemSolutions division posted a 3% year on year increase in revenues excluding divestments for the quarter, to €60.7m, due to higher sales.
Higher sales also buoyed the company’s paper, and municipal and industrial segments, which posted 5% and 2% revenue increases, to €259.1m and €164.8m respectively. Municipal and industrial revenues were slightly impacted by lower sales prices, Kemira added, while both divisions suffered from currency exchange issues, which cut revenues by 1%.
Oil and mining revenues fell 10% compared to the first quarter of 2012 to €76.3m, due to reduced mining industry demand and the withdrawal from some low-margin product lines.
The company predicts that its revenues for 2013 will be slightly higher in local currency terms than in 2012, excluding divestments, and that its operating EBIT will be at least 15% above 2012 levels.
Kemira also announced on Tuesday plans to close a paper chemicals production facility on Vaasa, Finland, and establish a multifunction business centre in Gdansk, Poland.
The company is aiming for €60m in annual cost savings by 2016.
($1 = €0.77)
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