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Sales at Arkema slip 3.3% in Q2
05
Aug '14
In the second quarter ending June 30, 2014, sales at France’s leading chemicals producer, Arkema fell 3.3% from a year ago to €1,520 million sales at constant business scope and exchange rate, despite volumes growing by 1.1 percent.
 
EBITDA too tanked steeply to €206 million from €273 million from the same quarter of 2013. However despite the challenging environment, EBITDA margin held up good resilience at 13.6%, Arkema said.
 
The strength of the euro versus the US dollar continued to impact the Group’s performance with a €6 million translation effect in the quarter under review. 
 
In line with the EBITDA trend, recurring operating income stood at €126 million against €195 million in second quarter of 2013, after deduction of €80 million depreciation and amortization, slightly up from last year.
 
Non-recurring items stood at a negative €22 million. They mostly correspond to various restructuring charges, including those related to the shutdown of production of coating resins on the Stallingborough site (United Kingdom) announced in second quarter and to various expenses related to acquisition and divestment operations.
 
Financial result too stood at a negative €16 million against a negative €13 million in corresponding quarter of 2013. It includes a €3 million charge relating to actuarial losses on provisions for long-service awards due to employees in France booked to take into account lower discount rates.
 
Income taxes amounted to €41 million, which is 32.5% of recurring operating income. They included a €4 million contribution due on the dividend paid out in May 2014. Excluding this contribution, the tax rate would stand at 29.4% of recurring operating income, reflecting the share of the Group’s results achieved in the United States.
 
Arkema Group net income plunged to €47 million in the quarter under review against €112 million from a year earlier, while net debt was slightly down to €1,106 million. 
 
Thierry Le Hénaff, Chairman and CEO of Arkema, said, “The performance in the second quarter is below our expectations due to lower volumes than expected in acrylics as well as a number of specific elements in polyamides. 
 
“However, we remain fully convinced of the relevance of the Group’s long term strategy and of our ability to benefit over the next three years of our various ongoing projects. After a sharp growth in Arkema’s results in the six years following our stock market listing, 2013 and 2014 represent a transition phase marked by the launch of many growth projects and by more challenging market conditions”. 
 
Arkema is however was optimistic of the future. Following a thorough review of each business unit, it still expects to achieve its 2015 mid-term targets of €8 billion in sales and an EBITDA margin of 16%. But it has pushed back targets set for 2016 to 2017. 
 

Fibre2fashion News Desk – India


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