Brazil Oxiteno sees return to volume growth in Q4 and 2014

08 November 2013 21:23  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--Brazil-based ethylene oxide (EO) and specialty chemicals producer Oxiteno will see a return to volume growth in the fourth quarter and throughout 2014, an executive for the parent company, Ultrapar, said on Friday.

During the third quarter, Oxiteno posted a 6% year on year drop in sales volumes to 193,000 tonnes amid lower glycols sales as the company built stocks in preparation for a fourth-quarter scheduled stoppage at its Camacari petrochemical complex.

In the second quarter, Oxiteno’s sales volumes were up by 12% year on year to 207,000 tonnes and, in the first quarter, by 6% to 198,000 tonnes.

“In terms of volume, we expect a return to growth in the fourth quarter, a return to normality,” said Ultrapar’s chief executive officer Thilo Mannhardt in a conference call with investors.

“That expectation also applies for the full year of 2014,” the executive added.

Despite the drop in volumes, Oxiteno posted Q3 sales of reais (R) 867m ($375m, €278m), up by 9% year on year due to a 13% drop in the value of the Brazilian real and a 3% higher average dollar price. Revenues for the year reached R2.44bn, up by 13%.

For the first nine months, Oxiteno recorded an earnings before interest, tax, depreciation and amortisation (EBITDA) margin of $250-$260/tonne, a level that Mannhardt expects will be maintained for next year.

Oxiteno is the sole producer of EO in Brazil, and the largest producer of speciality chemicals in Latin America, according to Ultrapar. The conglomerate also owns fuel distributors Ipiranga and Ultragaz, and liquid bulk storage firm Ultracargo.

During the third quarter, Ultrapar completed the $1bn acquisition of retail pharmacy Extrafarma, marking the company’s entrance into the sector.

($1 = €0.74, $1 = R2.31)

By: Simon West

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