Investors hope Synthos’s styrenics investments pay off – bank

29 April 2013 10:58  [Source: ICIS news]

LONDON (ICIS)--Investors will be watching to see if completed investments in styrenics undertaken by Poland’s Synthos make a significant difference to the company’s financial results this year, an investment bank said on Monday.

Synthos has boosted its polystyrene (PS) capacity to 105,000 tonnes/year from 80,000 tonnes/year and its expandable polystyrene (EPS) capacity to 215,000 tonnes/year from 200,000 tonnes/year.

“Although an improvement was visible in the styrenics part of the business in the second half of 2012, this segment, despite a 30% share in 2012 revenues, remains quite insignificant in terms of EBIT [earnings before interest and tax] generation, with a 6% share,” said Piotr Drozd, a chemical industry analyst at WOOD & Company investment bank.

In mid-April, Raiffeisen Centrobank said that growth in raw materials prices meant that Synthos’s styrenics business was operating on the verge of profitability.

The profitability of Synthos’s main business, synthetic rubber production, remains subdued due to depressed butadiene (BD) and styrene butadiene rubber (SBR) market dynamics in Europe and Asia, said Drozd.

“[But] we believe that the second half of 2013 should show the first signs of improvement, driven by gradually rebounding demand in the BD value chain,” he added.

By: Will Conroy
+44 20 8652 3214

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