US WR Grace Q2 net profit up 19% as construction margins improve

25 July 2013 12:18  [Source: ICIS news]

LONDON (ICIS)--WR Grace's second-quarter net profits climbed to $82.8m from $69.3m in the same period of 2012 on stronger materials and construction products performance, the US-based catalysts and specialty materials producer said on Thursday.

The company warned, however, that a pricing initiative for refinery catalysts was having an adverse effect on that business.

WR Grace’s sales for the period were down 2.9% at $802.8m.

“Earnings for the quarter came in as expected,” CEO Fred Festa said in a statement.

“Materials Technologies and Construction Products had solid quarters, benefiting from good growth in emerging regions and strong pricing and margins.

“In Catalysts Technologies, the customer operational issues that impacted the first quarter were successfully resolved. However, our refinery catalyst pricing initiative has not produced the results we wanted, with negative effects to our sales and earnings outlook in the second half.”

WR Grace’s Catalyst Technologies sales were down 11.5% at $290.9m in the latest quarter while adjusted earnings before interest and tax (adjusted EBIT) for the business were down 6.5% at $93.8m.

The company said that it had announced a 10% increase in base prices for its refining contracts but that the overall results of the initiative had been well below expectations. It wants to pursue the process, however, through 2014 as contract terms allow.

WR Grace’s Materials Technologies earnings for the second quarter were down 3.4% at $44.8m on sales up 2.0% at $228.7m. Construction Products profits were 27.6% higher at $45.3m on higher gross margins and lower operating expenses. Construction Products segment sales were up 3.4% at $283.2m.

Group adjusted EBIT for the quarter were down 1.0% at $142.1m.

The company, which has been under Chapter 11 bankruptcy protection since April 2001, said it expects adjusted EBIT to be in the $560m to $570m range for 2013.

By: Nigel Davis
+44 20 8652 3214

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