Home / Knowledge / News / Textiles / 'Trading environment remains highly uncertain & volatile' - Cognis CEO
'Trading environment remains highly uncertain & volatile' - Cognis CEO
27
May '09
In the first three months of 2009, in what was an extremely difficult market environment, global specialty chemicals supplier Cognis saw its sales volumes decline by about 18 percent in comparison to the first quarter of 2008. Compared with the fourth quarter of last year, volumes actually increased by 5 percent, driven by growth in North America and Asia.

Lower volumes were partially offset by increased selling prices, and as a result, the total net external sales figure of 659 million euros represents a fall of 13.8 percent compared to the first quarter of 2008. On an organic basis (excluding foreign currency effects and the effects of acquisitions and divestments), sales fell by 13.9 percent. These falls were largely attributable to lower demand and destocking by Cognis' customers, especially in Europe (down 23.5 percent).

Cognis' operating result (Adjusted EBITDA) fell by 19.3 percent to 73 million euros. In response to the sharp decline in sales volumes, the company implemented a comprehensive cost optimization program, with a savings target of 70 million euros in 2009. Cognis is also taking action to increase efficiency and improve process speed across all business areas. At the same time, it expects to benefit from lower energy and transportation prices.

Return on sales (Adjusted EBITDA as a percentage of sales) for the first quarter was 11.0 percent. Earnings before interest and taxes (EBIT) decreased by 21 million euros to 35 million euros. The company made a net loss including exceptional items of 33 million euros for the period (minus 43 million euros). This was due to the lower EBIT and a higher net financial result (minus 24 million euros).The higher net financial result is mainly due to book losses on our interest derivative arrangements, resulting from the reduction of market interest rates and to foreign exchange losses.

Operating cash flow in the period improved significantly and was up by 95 million euros to 101 million euros, primarily due to a positive change in working capital. The main cash generating drivers were a lower inventory position due to decreased prices and quantities as well as lower trade receivables in line with sales. Overall, Cognis' cash position increased substantially, to 241 million euros. The company also has a revolving credit facility of which 219 million euros were unused at the end of the quarter.

Cognis took advantage of the current conditions in capital markets to buy back PIK loans. As of today, PIK loans with a face value of 187 million euros have been purchased in a series of open-market transactions (thereof 112 million euros as of March 31). As a result the Cognis Group, including Cognis Holding GmbH, was able to improve its financing costs, equity position and net debt, which was cut by 176 million euros to 2.155 billion euros compared to March 31, 2008.

Cognis CEO Antonio Trius comments: “Cognis is responding to this dramatic economic downturn in a determined and proactive way. Our comprehensive cost reduction program is gathering momentum, and will help us counteract the effect of falling volumes.

Must ReadView All

Textiles | On 23rd Mar 2017

South Korean Samil Spinning acquires Buhler Quality Yarns

South Korean yarn producer Samil Spinning has acquired US based...

Apparel/Garments | On 23rd Mar 2017

E-retailers to pay up to 1% TCS under GST

E-retail marketplaces will need to deduct up to 1 per cent tax...

Textiles | On 23rd Mar 2017

Lanxess to expand chemical intermediates capacity

The Advanced Industrial Intermediates business unit of German...

Interviews View All

C Kamatchisundaram
Voltas

ITME is an occasion not only to receive new leads but also to work on...

Smarth Bansal
Colorjet India Limited

We would like to venture more companies into the Indian market

Abhishek Samdaria
Reflete

GST will certainly reduce a lot of paperwork in future

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Mohammad Hassan
Biax Fiberfilm

About one in every 20 patients picks up an infection while hospitalised....

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Rupa Sood and Sharan Apparao
Nayaab

Nayaab, an exhibition meant to celebrate Indian weaves, is in its second...

Pranav Mishra
Huemn

Designers Pranav Mishra and Shyma Shetty’s Huemn is known for its...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
March 2017

March 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


eNEWS
Insights
Subscribe today and get the latest News update in your mail box.
Advanced Search