Solutia experiences significant decline in volumes during Q4
Solutia Inc reported a 14% increase in net sales and a 29% increase in Adjusted EBITDA from continuing operations for 2008, as compared to 2007 on a pro forma basis.
Full-Year 2008: Consolidated Results from Continuing Operations:
Net sales for the full year 2008 were $2,110 million, an improvement of 14% over 2007 on a pro forma basis. Average selling prices increased 10%, and were positive across all business segments for the year. Volumes in total were basically flat, with Saflex reporting a gain of 3%, and CPFilms and Technical Specialties both down 2%. Adjusted EBITDA margins expanded to 19% in 2008 compared to 16% on a pro forma 2007 basis, resulting from improved selling prices which more than offset higher raw material costs.
Solutia had consolidated net income from continuing operations of $1,238 million for 2008 compared to a loss of $256 million for 2007. Solutia's results were impacted by certain events affecting comparability (detailed below) totaling an after- tax gain of $1,154 million in 2008 and a loss of $326 million in 2007.
After consideration of these items in both periods, income was up $14 million, from $70 million in 2007 to $84 million in 2008. Adjusted EBITDA increased to $392 million from $305 million over 2007, on a pro forma basis.
"Our achievements in 2008 were just the beginning of building Solutia into a performance material and specialty chemical company that creates value for our shareholders," said Jeffry N. Quinn, chairman, president and chief executive officer of Solutia Inc.
"We have transformed our portfolio to be focused on specialty materials and chemicals, improved our balance sheet and delivered strong financial results, with a 29% adjusted EBITDA improvement over pro forma 2007. Notwithstanding these strong full-year results, we did experience a significant decline in volumes during the fourth quarter as a result of the broader downturn in the global markets."
Fourth Quarter 2008: Consolidated Results from Continuing Operations:
Solutia reported a 13% decrease in net sales and a 4% increase in Adjusted EBITDA from continuing operations for the fourth quarter of 2008, as compared to the same period in 2007.
Solutia had a consolidated loss from continuing operations of $17 million for the fourth quarter 2008 compared to a loss of $126 million for the same period in 2007. Solutia's results were impacted by certain events affecting comparability (detailed below) totaling an after-tax loss of $28 million in 2008 and $147 million in 2007. After consideration of these items in both periods, income was down $10 million, from $21 million in the fourth quarter of 2007 to $11 million in the fourth quarter of 2008. This was primarily due to higher interest and stock compensation expenses.
Consolidated EBITDA for the fourth quarter increased to $35 million from $34 million in 2007. After taking into consideration adjustments (as detailed below in the consolidated and segment sales, EBITDA and Adjusted EBITDA table), Adjusted EBITDA increased to $72 million from $69 million.