Brazil Oxiteno Q2 income rises on higher sales

Source: ICIS News

2018/11/07

HOUSTON (ICIS)--Brazilian specialty chemicals producer Oxiteno’s Q3 operating income rose sharply from the same time in 2017, mostly because sales rose faster than costs.

The following table summarises Oxiteno’s Q3 performance. Figures are in millions of reais.

Q3 2018 Q3 2017 Change (%)
Operating income                                    130.6                                      35.1 272.1
Sales                                1,368.4                                1,030.0 32.9
Costs                                1,037.7                                    824.7 25.8
Gross profit                                    330.7                                    205.3 61.1

Oxiteno’s Q3 volumes decreased year on year because of weaker sales of specialty chemicals, following a record period in Q3 2017.

The following table summarises Oxiteno’s Q3 volumes. Figures are in thousands of tonnes.

Q3 2018 Q3 2017 % Change
Total volumes 205 211 -2.8
Specialty chemicals 162 173 -6.4
Commodities 44 37 18.9
Sales in Brazil 151 154 -1.9
Sales outside of Brazil 54 56 -3.6

Oxiteno’s Q3 earnings before interest, taxes, depreciation and amortisation (EBITDA) was real (R)173m ($46m) compared with R74m in Q3 2017.

This was driven by higher exchange rates amid the 25% depreciation in the real against the US dollar and higher unit margins in US dollar terms.

The results considered a R7m impairment at Oxiteno Andina on the adverse political and economic scenario at Venezuela.

During the quarter, Oxiteno also started up its new US alkoxylation plant in Pasadena, Texas. The plant has a capacity of 170,000 tonnes/year and produces a wide range of nonionic surfactants and specialty alkoxylates.

Oxiteno is the sole producer of ethylene oxide (EO) in Brazil and the largest producer of specialty chemicals in Latin America, according to its parent company, Ultrapar.

Ultrapar also owns fuel distributors Ipiranga and Ultragaz, liquid bulk storage firm Ultracargo and the drugstore chain Extrafarma.

($1 = R3.76)

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