Currency effects, fewer one-off charges, buoy Arkema Q4 income

Tom Brown

05-Mar-2015

(updates with more financials throughout)

Arkema Head OfficePARIS (ICIS)–An improvement in the currency exchange conditions and a reduction in one-off charges for its thiochemicals operations helped lift Arkema’s net income in the fourth quarter of 2014, the France-headquartered specialty chemicals producer said on Thursday.

Fourth-quarter net income rose 9.5% year on year to €23m, as a weakening of the euro against the dollar helped to offset lower margins for its acrylic monomers operations, Arkema added.

Sales increased 1.4% for the period year on year to €1.43bn, although on a constant currency basis, revenues fell 1.7%. Fourth-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) were unchanged at €162m, the company added.

High performance materials division earnings before interest, taxes, depreciation and amortisation (EBITDA) fell from €68m in the fourth quarter of 2013 to €59m during the same period in 2013.

Arkema attributed the fall to reduced oil and gas market demand for filtration and absorption services from the oil and gas industry on the back of the falling crude price. The polyamide 12 market also remains challenged, by new capacity that came onstream in 2014, but the situation has stabilised compared to the second quarter of the year.

Fourth-quarter industrial specialties EBITDA rose from €48m to €72m on the back of stabilising market conditions for fluorogases, strong demand for polymethyl methacrylate (PMMA), and a high performance by thiochemicals operations.

Coating solutions fourth-quarter EBITDA fell from €52m to €39m year on year due to seasonal low margins on the back of new capacity coming onstream in China, the company added.

For the full year of 2014, Arkema’s group share net income slipped by 0.6% to €167m amid a 2.4% decline in sales to €5.95bn.

The firm’s EBITDA fell by 13.1% year on year to €784m in 2014, while adjusted net income was down by 35.1% at €239m.

“In 2015, market conditions are expected to remain volatile and contrasted, with different dynamics depending on geographic regions and product lines, Arkema said.

“The changes in foreign exchange rates, primarily for the US dollar versus the euro, should make a positive contribution, which should offset low-cycle unit margins in acrylic monomers as well as market conditions that should normalise in polymethyl methacrylate (PMMA) after an excellent 2014,” it said.

Oil price movement should have limited impact on the Arkema’s results in 2015, it said.

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