05 November 2013 13:12 [Source: ICIS news]
LONDON (ICIS)--US specialty chemicals company Ashland said on Tuesday that its net income for the fiscal fourth quarter of the year had increased sharply to $405m (€300m) compared to a $274m loss in the corresponding period in 2012.
The company attributed the jump in net income to an actuarial gain on pension as part of its end-year financial re-measurement which, along with four other “key items”, buoyed the company’s continuing operations of $283m (€209m).
The company added that it expects to announce the sale of its water technologies division in the first quarter of 2014, after announcing that it was considering a sale in July this year. Ashland added that the primary use of proceeds from the sale would be to fund a share repurchase.
Sales for the period, ending 30 September, were down 7% year on year to $1.91bn, while adjusted operating income fell 17% to $203m.
Volumes were flat during the quarter, while earnings before interest, taxes, depreciation and amortisation (EBITDA) fell by 11% to $310m.
While the company’s fiscal fourth-quarter results were buoyed this year by special items, the converse was true during the corresponding period in 2012, when five key items reduced income from continuing operations by $422m. The largest weights on fourth-quarter 2012 income were an actuarial loss on pension, and a debt refinancing charge.
Excluding the key items, Ashland’s fourth-quarter earnings this year were $1.54 per share, compared to $1.87 per diluted share in the fourth quarter of 2012.
Ashland CEO James O’Brien attributed the company’s financial performance during the quarter, which “fell short of expectations”, to a weaker performance by its specialty ingredients division.
“Most of the decline in sales and profitability during the fourth quarter occurred within
“The commercial unit experienced significantly lower sales and volume for guar and intermediates and solvents when compared to a year ago. In addition, we faced pricing pressure in the intermediates and solvents business and issues related to the rollout of our enterprise resource planning system,” he added.
($1 = €0.74)
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