30 April 2013 12:16 [Source: ICIS news]
LONDON (ICIS)--First-quarter net profit fell by 14.7% to $19.0m (€14.4m) year on year as weak construction demand hit its polymers chemicals businesses, US intermediates producer Stepan said on Tuesday.
Sales were down 1.9% at $457m with polymer segment sales volumes down 7% and weaker surfactant margins. Stepan makes surfactants and polymer products, including polyether polyols for polyurethane foams, and phthalic anhydride (PA).
Surfactant sales were down 2.1% at $340m while volumes were 5% higher with growth coming from consumer products. Higher margin functional surfactants used in agriculture saw volumes rise by 26% year-on-year, Stepan said
Polymer segment sales were down 0.8% at $96m with polyol volumes down 5% largely because cold weather delayed commercial construction in North America and Europe’s economic growth was slow.
Stepan said that polymer segment gross profit declined by 5% to $16.6m. Surfactant segment gross profit was down 4% at $51.6m
Stepan also produces lipids for the food, nutrition and drug industries in its speciality products segment. Specialty products first-quarter sales were down 3.7% at $20.6m with segment gross profit down 17% at $5.2m largely on foreign price competition and higher raw material costs.
The company expects better surfactants margins as the year progresses and improved polymer volumes in the second quarter, according to CEO Quinn Stepan Jr.
"The recently announced acquisition of the polyester resins business from Bayer will help diversify and grow our polyol business," he added.
“The acquisition should be accretive to 2013 earnings. The lower first-quarter results will challenge us to deliver full year earnings growth in 2013,” he said.
($1 = €0.76)
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