05 August 2013 13:32 [Source: ICIS news]
LONDON (ICIS)--Rockwood Holdings said on Monday that its net income fell by 86% year on year during the second quarter of the year to $32.3m (€24.2m) as titanium dioxide (TiO2) losses continued to weigh on the US specialty chemicals company’s bottom line, exacerbated by sales charges.
A 117% drop in adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) for the company’s TiO2 division to a $9.5m loss more than wiped out improved results from Rockwood’s surface treatments, lithium and advanced ceramics businesses.
$25.5m-worth of net charges related to the €1.49bn sale of its ceramics business CeramTec to European private equity firm Cinven in June and the $635m sale of its clay-based additives business to Germany’s ALTANA in July also weighed on the company’s quarterly results.
Group sales increased by 7.8% year on year during the quarter to $822.3m, while total adjusted EBITDA from continuing operations fell by 33% during the period to $116.1m.
“Our core lithium and surface treatment business segments performed well within expectations, delivering improved quarter on quarter adjusted EBITDA performance,” said Rockwood CEO Seifi Ghasemi.
“These results however, were overshadowed... by continued weak performance from the titanium dioxide pigments business,” he added.
Adjusted EBITDA for lithium earnings increased by 1.9% year on year to $49m as higher volumes and prices for lithium carbonate, lithium hydroxide and specialty salts offset lower selling prices for potash and battery products.
Surface treatment division adjusted EBITDA increased by 11.3% to $43.4m as a result of higher volumes and selling prices driven by demand from automotive manufacturers and general industrial applications, while performance additives EBITDA increased by 2.6% to $39.3m as lower costs offset lower sales.
The company is planning to withdraw from the TiO2 business by the end of this year, following the acquisition of all outstanding stakes in loss-making subsidiary Sachtleben in February. The company bought up the 39% stake in the business held by former joint venture partner Kemira for €97.5m, to give it more flexibility in reviewing its options.
Ghasemi predicted that Rockwood’s lithium and surface treatments divisions will continue to grow in the second half of the year, and that its TiO2 operations will undergo a slight turnaround in fortunes.
He said: “We believe that our [TiO2] business will achieve a turn-around with adjusted EBITDA margins trending in excess of 10%. And with a key priority of maximising shareholder value, we will continue with our unrelenting focus on evaluating all of our options with respect to the remaining non-strategic businesses.”
($1 = €0.75)
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