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Results of Celanese Corp reflect strong top-line growth
22 Jul '08
5 min read
• Resolved a legacy litigation matter by entering into a settlement agreement relating to sales by the polyester staple fibers business, which Hoechst AG sold to KoSa, Inc. in 1998.
• Announced intent to divest ownership interest in legacy Infraserv investments located in Knapsack, Gendorf, and Wiesbaden, Germany, where Celanese no longer has manufacturing operations.
Second Quarter Segment Overview:
Advanced Engineered Materials:
Advanced Engineered Materials continued to execute its growth strategy, as global expansion offset the impacts of ongoing challenges in the U.S. automotive sector and initial signs of weakness in the European sector. Net sales increased to $300 million from $257 million in the same period last year, primarily on positive currency impacts, as well as higher volumes, particularly in Asia.
Operating profit increased to $37 million from $32 million in the prior year period, as increased volumes and lower overall expense more than offset significantly higher raw material and energy costs, including ethylene and other petroleum-based feedstocks. Operating EBITDA, however, was $68 million compared with $70 million in the same period last year, mainly due to lower earnings from equity affiliates.
Consumer Specialties:
Consumer Specialties continued to contribute stable earnings, driven by its expansion in Asia and successful integration of its acquired Acetate Products Limited (APL) business. Net sales increased to $292 million compared with $281 million in the same period last year, driven by higher pricing on continued strong demand and positive currency impacts.
Higher acetate tow volumes helped to offset lower acetate flake volumes resulting from the company's strategic decision to shift flake production to its expanded acetate China ventures, and slightly lower volumes for Sunett, the company's high intensity food sweetener business.
Operating profit was $46 million, $2 million lower than last year's results, as the higher pricing could not fully offset significantly higher raw material and energy costs in the period. Operating EBITDA increased to $107 million from $104 million in the same period last year, however, on higher dividends from the company's China ventures.
Industrial Specialties:
Continued revitalization of the Industrial Specialties businesses delivered improved results, despite continued softness in certain markets and significantly higher raw material costs. Net sales increased to $386 million from $355 million in the same period last year, primarily driven by higher pricing related to increased raw material costs, as well as favorable currency impacts. Increased volumes related to the company's strategic expansion in Asia were offset by volume declines in North American and southern European painting and coating applications.
Operating profit increased to $20 million, compared with a loss of $1 million in the prior year period, as higher pricing more than offset higher raw material costs and the lower volumes. The 2007 results included approximately $19 million of expense related to the company's revitalization activities. Operating EBITDA was $37 million compared with $34 million in the second quarter of 2007.
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• Announced intent to divest ownership interest in legacy Infraserv investments located in Knapsack, Gendorf, and Wiesbaden, Germany, where Celanese no longer has manufacturing operations.
Second Quarter Segment Overview:
Advanced Engineered Materials:
Advanced Engineered Materials continued to execute its growth strategy, as global expansion offset the impacts of ongoing challenges in the U.S. automotive sector and initial signs of weakness in the European sector. Net sales increased to $300 million from $257 million in the same period last year, primarily on positive currency impacts, as well as higher volumes, particularly in Asia.
Operating profit increased to $37 million from $32 million in the prior year period, as increased volumes and lower overall expense more than offset significantly higher raw material and energy costs, including ethylene and other petroleum-based feedstocks. Operating EBITDA, however, was $68 million compared with $70 million in the same period last year, mainly due to lower earnings from equity affiliates.
Consumer Specialties:
Consumer Specialties continued to contribute stable earnings, driven by its expansion in Asia and successful integration of its acquired Acetate Products Limited (APL) business. Net sales increased to $292 million compared with $281 million in the same period last year, driven by higher pricing on continued strong demand and positive currency impacts.
Higher acetate tow volumes helped to offset lower acetate flake volumes resulting from the company's strategic decision to shift flake production to its expanded acetate China ventures, and slightly lower volumes for Sunett, the company's high intensity food sweetener business.
Operating profit was $46 million, $2 million lower than last year's results, as the higher pricing could not fully offset significantly higher raw material and energy costs in the period. Operating EBITDA increased to $107 million from $104 million in the same period last year, however, on higher dividends from the company's China ventures.
Industrial Specialties:
Continued revitalization of the Industrial Specialties businesses delivered improved results, despite continued softness in certain markets and significantly higher raw material costs. Net sales increased to $386 million from $355 million in the same period last year, primarily driven by higher pricing related to increased raw material costs, as well as favorable currency impacts. Increased volumes related to the company's strategic expansion in Asia were offset by volume declines in North American and southern European painting and coating applications.
Operating profit increased to $20 million, compared with a loss of $1 million in the prior year period, as higher pricing more than offset higher raw material costs and the lower volumes. The 2007 results included approximately $19 million of expense related to the company's revitalization activities. Operating EBITDA was $37 million compared with $34 million in the second quarter of 2007.
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Celanese Corporation
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