May '15
A Solvay press release informed that adjusted net income surged to €158 million, up a massive 49 per cent versus €106 million in the corresponding quarter of 2014.
Net sales grew 6.4 per cent year over year to €2,646 million mainly driven by favourable foreign exchange rates, while volumes were globally down 1.7 per cent from the prior year first quarter.
“Innovation driven-demand growth and price increases in some businesses were more than offset by significantly reduced activity levels in acetate tow and oil & gas markets,” Solvay said.
Net sales grew 6.1 per cent in the Advanced Formulations division fully due to the appreciation of the US dollar against the Euro that compensated for weaker activity levels.
The Advanced Materials division net sales expanded 22 per cent, supported by strong innovation-driven demand growth.
The Performance Chemicals division however reported sales growth of just 5 per cent, due to a 14 per cent de-growth in the Functional Polymers segment from divestment of Benvic and lower raw material prices.
Reported EBITDA for the reporting quarter rose 12 per cent year on year to €502 million, mainly led by favourable foreign exchange rates in all business divisions.
Margins widened to 19 per cent of net sales, up 100 basis points from the first quarter of 2014, which Solvay said, reflects sustained pricing power.
As on March 31, 2015, the chemicals marketer’s net debt nearly doubled at €1,417 million as against €778 million on December 31, 2014.
Cash flow from operating activities was down to €85 million in the first quarter of 2015 compared to €97 million in the same quarter of last year.
Free cash flow amounted to €344 million and included cash flow from discontinued operations which totaled to €75 million.
Solvay informed that it is building a new specialty polymers resin unit at its US Augusta site, significantly expanding its global PEEK production capacity to more than 2,500 metric tons.
This makes Solvay Specialty Polymers the only PEEK producer with a US manufacturing presence and follows expansion plans in India.
It added that its KetaSpire and AvaSpire ultra-polymers, used in healthcare, electronics, aeronautics and automotive industries, are key in lightweighting and lowering energy consumption.
CEO Jean-Pierre Clamadieu said, “Headwinds in oil & gas and in acetate tow markets were overcome by sustained demand for our innovation-driven solutions and pricing power.”
“Recent acquisitions are being integrated successfully while the creation of the planned European PVC joint venture is progressing well,” Clamadieu too added.
On its outlook for the rest of 2015 and based on current conditions, Solvay is confident of its capacity to generate solid reported EBITDA growth in 2015. (AR)
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