09 January 2014 10:39 [Source: ICIS news]
LONDON (ICIS)--Investment bank UBS on Thursday lowered its 12-month price target for Arkema from €100 to €98 after the France-based specialty chemicals company downgraded its expected earnings before interest, tax, depreciation and amortisation (EBITDA) for 2013 to €900m, although the bank held its 'buy' recommendation.
UBS also updated its expected 2013 EBITDA forecast for Arkema to €900m, in line with the company’s latest guidance, and lowered EBITDA guidance for 2014 to €999m, on the back of lower base estimates, more adverse foreign exchange rates and lower growth at the group's Fluorogas division.
The investment bank said Arkema will still deliver a 5.3% free cash flow yield in 2014 after France's Commercial Court of Lyon approved a business continuity takeover plan for upstream vinyl unit KEM ONE SAS, the upstream vinyls production unit of KEM ONE, submitted by US-based buy-out firm OpenGate Capital and industrialist Alain de Krassny.Switzerland-based Klesch Group bought KEM ONE from Arkema in July 2012. UBS added the deleveraging process adds value to Arkema.
Arkema revised down its EBITDA for 2013 to €900m on 8 January, versus a previously forecast €920m reported in November, as a consequence of the underperformance of its Thiochemicals and Fluorogas divisions.
Arkema attributed the downward revision to a longer-than-expected commissioning period for new investments made at its French plant of Lacq, the force majeure at its Beaumont site in the US and anticipated lower fluorogas volumes.
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