30 July 2013 12:34 [Source: ICIS news]
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LONDON (ICIS)--Strong earnings before interest and taxes (EBIT) for Clariant’s catalysis and energy division helped to drive a 16% rise in net income for the Swiss chemicals producer, the company said on Tuesday.
Clariant’s second-quarter net profit to Swiss franc (Swfr) 79m ($85m, €64m) compared to Swfr68m during the same period the previous year, while sales rose 1% year on year to Swfr1.54bn, the company said.
Operating profit before exceptional items was up by 7% year on year to Swfr144m, while earnings before interest, tax, depreciation and amortisation (EBITDA) before exceptional items rose by 6% to Swfr211m, it said.
The company’s catalysis and energy arm posted the strongest EBIT of any division, growing by 17% year on year during the quarter to Swfr35m, despite a 7% fall in sales, due in part to a number of orders being shifted from the third quarter to the second quarter in 2012, according to Clariant.
“Sales in petrochemicals and specialty catalysts were weaker as a result of a lower number of re-fill contracts due to customer change-out cycles and the extraordinarily high prior-year base. However, underlying demand remains robust,” the company noted.
Clariant attributed the rise in EBIT despite the sales shortfall to “an enhanced product mix... which more than overcompensated the effect of the weaker sales”.
The company’s care chemicals operations – including personal, industrial and crop care products – generated a 6% increase in sales during the quarter to Swfr370m, on the back of strong demand from Latin America. Smaller growth increases in Europe and North America helped to offset static demand in the Asia Pacific region and slumping sales in the Middle East.
However, care chemicals posted a 4% year on year fall in EBIT, as a result of ethylene oxide supply issues in North America and weak demand in Japan and other parts of Asia.
Sales were flat year on year for Clariant’s plastics and coatings business, despite stronger pigments sales, as a result of flat masterbatches earnings and falling additives demand.
EBIT for the division was down 20% to Swfr60m as a result of a smaller contribution from high-margin products, and lower demand from Japan.
Natural resources division EBIT was down 6% year on year during the quarter to Swfr17m, primarily due to weak demand for water treatment products and services, Clariant said.
The company’s first half 2013 net income rose to Swfr129m from Swfr85m in the same period last year, while sales for the six months to June rose Swfr3.07bn from Swfr3.04bn recorded in the first half of 2012.
“The environment in which Clariant operates has not significantly changed over the past few months. Going into the second half-year, Clariant expects stability in mature markets but rising uncertainties in emerging economies,” it said.
Clariant is gradually progressing towards its short- and mid-term targets, company CEO Hariolf Kottmann said in the statement.
“Although we perceive rising uncertainties in emerging markets, we continue to see a rather stable economic environment at a low level. In this scenario, we are confident that we will achieve our full-year targets by focusing on innovation, growth and cost efficiency,” Kottmann added.
($1 = €0.75, Swfr1 = €0.81, $1 = Swfr0.93)
Additional reporting by Tahir Ikram
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