Improved sales, weaker euro drive up Kemira’s Q3 profits

(updates financial detail throughout)

LONDON (ICIS)–Kemira’s net profit rose 66% year on year to €27m in the third quarter of 2014, despite lower revenues, as earnings benefited from higher sales volumes and positive currency effects, the Finland-based producer said on Wednesday.

Revenue fell by 2.2% year on year to €541.5m in the third quarter due to the impact of earlier divestments, which impacted results by 9%, Kemira said.

Earnings before interest, tax, depreciation and amortisation (EBITDA) were up by 33% at €67.2m, buoyed by a positive currency impact as the euro weakened against the dollar, and €7m in sales volume growth, the company added.

Organic growth accelerated from 1% to 3% during the quarter, according to company CEO Jari Rosendal, who noted a shift in the company’s strategy from efficiency savings to growth.

“In the third quarter, Kemira’s organic growth accelerated to 3% from 1% in the first half of 2014. Paper and Oil & Mining continued to grow above-the-market and Municipal & Industrial’s revenue showed signs of recovery,” he said.

“Kemira is moving forward in the next phase of its strategy implementation: focusing on growth,” he added.

Paper division operative EBITDA increased 4% year on year during the quarter to €37m as increased sales more than offset increased raw materials costs, while municipal and industrial division earnings fell 3% year on year to €19.1m, as sales prices followed declining coagulant raw materials costs, Kemira said.

Oil and mining division operative EBITDA earnings increased 33% year on year to €13.8m, driven by increased North American demand on the back of increased horizontal drilling actitivty in the region, the company added.

In the first nine months of this year, the company’s net profit more than tripled to €71.9m from €22.8m in the same period in 2013.

However, Kemira maintained its outlook for the year, with revenue in local currencies and excluding acquisitions and divestments to be 0-5% up on 2013, while operative EBITDA is likely to be unchanged from last year. 2013 operative EBIT stood at €164.2m.

Additional reporting by Nurluqman Suratman.