US A Schulman’s Q3 net profit falls 69% on lower net sales

01 July 2013 22:12  [Source: ICIS news]

HOUSTON (ICIS)--A Schulman’s fiscal Q3 net income fell more than 69% year over year due to decreased net sales primarily because of the sluggish European economy, the US compounder said on Monday.

For the quarter that ended 31 May, A Schulman reported a net income of $5.2m (€4.0m), compared with $17.0m in Q3 2012, the company said in a news release.

Net sales in the Europe-Middle East-Africa (EMEA) region for the third quarter were $363m, down about 5.5% year over year from Q3 2012. Net sales for the Americas and the Asia-Pacfic regions were up but not enough to make up the difference, with total net sales falling 2.6% for the quarter, A Schulman said.

"We continue to face inconsistent order patterns in our European markets, but the strong performance of our Americas and Asia Pacific segments had helped to offset this challenge in prior periods; however, this did not occur during the fiscal 2013 third quarter,” said Joseph Gingo, CEO of the Akron, Ohio-based company.

A Schulman has begun restructuring and streamlining efforts in the EMEA region and Brazil and also is looking to sell its rotational compounding business in Brisbane, Australia.

The company has said that its restructuring efforts in Europe should yield $4m/year in savings but will also result in job cuts.

In the US, the company said it is planning to downsize its capacity at its Grand Junction, Tennessee, plant for an annual savings of up to $1.7m in 2014. The downsizing will result in the reduction of about 25 jobs, A Schulman said.

Through its current challenges, the compounder will continue look for acquisitions, Gingo said.

In March, A Schulman made an unsolicited bid for Ohio-based specialty chemicals producer Ferro at $6.50/share. Ferro declined the offer.

In May, it reached an agreement with Network Polymers to purchase the specialty compounder for about $50m.

($1 = €0.77)


By: Jeremy Pafford
+1 713 525 2653



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