LANXESS: Earnings for fiscal year 2014 exceed expectations

MOSCOW (MRC) -- Specialty chemicals company LANXESS expects EBITDA pre exceptionals to be higher than previously anticipated for the fourth quarter and therefore for the fiscal year 2014, said the producer in its press release.

Against EUR 735 million reported in fiscal 2013, EBITDA pre exceptionals for fiscal 2014 is expected to increase to around EUR 808 million.

The fourth quarter 2014 result is expected at around EUR 154 million EBITDA pre exceptionals. Basis for the improved earnings was a stronger than originally anticipated demand in December.

Matthias Zachert, Chairman of the Board of Management of LANXESS AG: "In autumn, we were witnessing restrained orders due to customer destocking in the rubber business in light of falling oil prices. Surprisingly, this development was considerably less strong in December". Additionally, LANXESS profited from lower raw material costs in the Advanced Intermediates segment. Earnings in the Performance Chemicals segment came in at the expected level.

LANXESS will release final results for fiscal 2014 on March 19, 2015. All figures provided in this release are preliminary and unaudited.

As MRC wrote before, LANXESS added two new highly concentrated antioxidants to its existing range of biodiesel stabilizers. The new products - Baynox Ultra and Baynox Cargo - were introduced to the US market at the National Biodiesel Conference & Expo January 19-22 in Fort Worth, Texas.

LANXESS is a leading specialty chemicals company with sales of EUR 8.3 billion in 2013 and about 16,700 employees in 29 countries. The company is currently represented at 52 production sites worldwide. The core business of LANXESS is the development, manufacturing and marketing of plastics, rubber, intermediates and specialty chemicals. LANXESS is a member of the leading sustainability indices Dow Jones Sustainability Index (DJSI World and DJSI Europe) and FTSE4Good.
MRC

MOSCOW (MRC) -- Dow Chemical Co. reported stronger-than-expected fourth-quarter earnings, as higher volumes across the board offset price declines in Western Europe related to the impact of the strong dollar, said The Wall Street Journal.

Falling oil prices have sparked investor concerns about Dow and other petrochemical manufacturers in the U.S. Profit margins are bolstered in North America by cheap natural gas and other fuels that Dow and its peers use to make plastics and consumer goods, while foreign competitors tend to run plants on higher-priced oil-based feedstocks. Now that oil prices have fallen, some analysts have questioned whether Dow’s competitive edge may be fading.

But Chief Executive Andrew N. Liveris said falling prices are good for the company. "We believe lower oil prices are a relative positive for Dow and a boost for the global economy," he said. He said the company’s global-cost positions helps it use assets more effectively and sell into higher-value sectors. In addition, the company’s differentiated technologies help it maximize returns in sectors less susceptible to pricing volatility.

Overall, Dow’s profit fell to USD819 million, or 63 cents a share from USD1.05 billion, or 79 cents a share, a year earlier. Revenue was flat at USD14.38 billion, as volume gains in emerging areas were offset by a 14% price declines in Western Europe, including currency headwinds.

The company had expanded volume in most segments, led by a 9% increase in agriculture sciences. Performance materials saw a 7% increase while performance plastics was up 3%.

In recent quarters, Dow has been trying to sell lower-margin business lines to raise USD3.2 billion to USD4.7 billion by the end of this year.

Due to these restructuring efforts, selling and administrative expenses, together with research and development expenses, fell by USD64 million from the year before.

Dow recently faced pressure from activist investor Daniel Loeb of hedge fund Third Point LLC to split off its petrochemicals business from its specialty-chemicals business. In November, Dow agreed to add two directors proposed by Third Point to its board to appease the activist investor.

As MRC wrote before, Dow Chemical signed a long-term ethylene off-take agreement with a new Japanese joint venture that will allow the chemical producer to enhance its performance plastics franchise. The joint venture is being formed between Japanese companies Idemitsu Kosan and Mitsui & Co. to construct and operate a Linear Alpha Olefins unit on the U.S. Gulf Coast.

The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene (PS), polyurethane, polyethylene (PE), polypropylene (PP), and synthetic rubber.
MRC

MOSCOW (MRC) -- BASF, the world's petrochemical major, is further strengthening its production footprint in Asia Pacific with the start-up of its first production plant for polymer dispersions in Pasir Gudang, Malaysia, as per the company's press release.

This production plant is built at the existing BASF production site, located in the Pasir Gudang Industrial Park of the Johor Free Trade Zone. The plant is BASF’s third polymer dispersions plant in ASEAN, complementing the existing dispersions plants in Jakarta and Merak, Indonesia.

This wholly-owned BASF production plant will benefit from close proximity to raw materials such as the acrylic monomer complex at BASF PETRONAS Chemicals in Gebeng, Kuantan. Local production in Malaysia will enable BASF to better respond to the fast-changing market situation in Asia Pacific.

"The plant is built with BASF’s advanced production technology, which can accommodate a broad spectrum of acrylic products that are being developed in our Asia Technical Center in Shanghai, China. These cutting edge products with tailored properties can be made in this versatile production facility, addressing the increased customers’ requirement," said Jeff Knight, Senior Vice President, Dispersions and Pigments, Asia Pacific.

The new plant will focus on the production of a variety of acrylic base polymer dispersions for decorative coatings, construction and adhesive industries, serving the entire Asia Pacific region, especially for South East Asia. Commercial production started at the beginning of 2015.

This investment represents another milestone in the implementation of BASF’s Asia Pacific strategy. By 2020, BASF aims for local production of approximately 75% of the products it sells in the Asia Pacific region in order to intensify its collaboration with and strengthen its supply position to customers in Asia Pacific. To achieve this, BASF is investing EUR10 billion together with its partners from 2013 to 2020 to further develop its local production footprint in Asia Pacific.

As MRC reported earlier, in june 2014, BASF undertook three key capacity expansion projects for performance materials at its Pudong site in Shanghai (China). The capacity expansion projects includes Ultramid (polyamide, PA), Ultradur (polybutylene terephthalate, PBT), Elastollan thermoplastics polyurethane elastomers (TPU), and Technical Center and capacity expansion of Cellasto (microcellular polyurethane components).

BASF is the world’s leading chemical company. Its portfolio ranges from chemicals, plastics, performance products and crop protection products to oil and gas. BASF had sales of about EUR74 billion in 2013 and over 112,000 employees as of the end of the year.
MRC

MOSCOW (MRC) -- Royal Dutch Shell has signed a deal with Iraq worth USD11 billion to build a petrochemicals plant in the southern oil hub of Basra, boosting the country's aim to become a major regional energy player and diversify its income, reported Reuters.

Industry Minister Nasser al-Esawi told a news conference the Nibras complex, which is expected to come online within five to six years, would make his country the largest petrochemical producer in the Middle East.

Iraq, which relies on oil for more than 90% of its revenue, has been hit hard by the steep fall in global oil prices since June, with Brent crude now hovering around USD50 a barrel.

"The Nibras complex will be one of the largest (foreign) investments (in Iraq) and the most important in the petrochemical sector in the Middle East," Esawi said.

He said the factory would produce 1.8 million tonnes of petrochemical products per year.

A Shell spokesman told Reuters Iraq's cabinet had authorised the project on Jan 13. Company officials declined to confirm the size or types of output expected from the facility.

We remind that, as MRC wrote before, Shell restarted its ethylene cracker in Bukom, Singapore, last week following a three-month maintenance and expansion works to raise the unit's capacity. Shell said the expansion work would increase the capacity of the cracker by 20%. The cracker originally had a capacity of 800,000 tonnes per year (tpy) of ethylene. The cracker uses a range of feedstock including naphtha and liquefied petroleum gas (LPG) to produce ethylene, a building block for plastics.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

MOSCOW (MRC) -- Energy group Royal Dutch Shell has announced an eight-per cent drop in annual net profits owing to a slump in global oil prices and said it would accelerate spending cuts, said Digitalook.

Profit after tax dropped to US15.05 billion (A18.99 billion) in 2014 compared with the Anglo-Dutch company's performance one year earlier, dragged down by plunging earnings in the fourth quarter as the cost of crude tumbled.

"Compared with the fourth quarter 2013, earnings... were impacted by the significant decline in (the price of) oil," Shell said in a statement.

Fourth-quarter net profit plunged 57 per cent to US773 million compared with the final three months of 2013.

Shell said it would slash spending by more than US15.0 billion over the next three years.

"The agenda we set out in early 2014 to balance growth and returns has positioned us well for the current oil market downturn," said Shell chief executive Ben van Beurden.

"We are taking a prudent approach here and we must be careful not to over-react to the recent fall in oil prices. Shell is taking structured decisions to balance growth and returns," he added in the results statement.

Shell noted that lower prices created opportunities for the group to cut costs.

It added that deferring spending in many areas and driving costs down in the supply chain "should result in reduction of potential capital investment for 2015-17 of over US15 billion".

As MRC wrote before, Shell restarted its ethylene cracker in Bukom, Singapore, this week following a three-month maintenance and expansion works to raise the unit's capacity. Shell said the expansion work would increase the capacity of the cracker by 20%. The cracker originally had a capacity of 800,000 tonnes per year (tpy) of ethylene.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC