MOSCOW (MRC) -- Plastic manufacturer A. Schulman Inc. reported higher fourth-quarter profit, bolstered by its recent acquisition of HGGC Citadel Plastics Holdings, but the company warned that continued market volatility would still weigh on results, said the company on its site.
For the current year that ends in August, Schulman projects profit of USD2.80 to USD2.85 a share, compared with the USD2.97 a share projected by analysts.
Shares, down nearly 9% this year, fell 0.24% to USD36.95 in late trading. The Ohio company had reported two consecutive quarters of losses, as results were battered by a stronger U.S. dollar. Though based in the U.S., Schulman does most of its business abroad and has been hit hard by falling demand in Europe.
In the latest period, currency conversions lowered revenue by about USD79.8 million, Schulman said. Overall, for the quarter ended Aug. 31, Schulman reported a profit before convertible special dividends of USD23.7 million, or 75 cents a share, compared with USD15.2 million, or 51 cents, a year earlier. Excluding restructuring- and acquisition-related costs and other items, profit fell to 64 cents from 66 cents a share a year earlier.
Revenue rose 7% to USD674 million, as Citadel's acquisition added about USD128.5 million, Schulman said. Analysts had projected a profit of 64 cents a share on USD685.8 million in revenue, according to Thomson Reuters.
In the latest period, revenue from Europe, the Middle East and Africa fell 16% to USD326.7 million, with currency conversion lowering revenue by USD64.1 million. Sales in U.S. and Canada, meanwhile, jumped 41% to USD195.3 million, largely due to the Citadel acquisition.
Schulman said that as part of its Citadel integration, it planned to consolidate its U.S. and Canada production facilities, resulting in the elimination of 26 positions and three plants closing in Evansville, Ind. Engineered plastics' production will move from Akron, Ohio, to one of its locations in Evansville, Schulman said, adding the Akron plant will focus on its Masterbatch product line.
As MRC informed earlier, A. Schulman completed the previously announced acquisition of HGGC Citadel Plastics Holdings (West Chicago, IL, US), a portfolio company of private equity firms HGGC and Charlesbank Capital Partners, for USD800 million in June 2015.
A. Schulman is a global plastics supplier, headquartered in Akron, Ohio, and a leading international supplier of high-performance plastic compounds and resins, which are used as raw materials in a variety of markets. A. Schulman has 33 manufacturing facilities globally. A. Schulman's fiscal third-quarter earnings fell 69% amid continued sluggishness in European markets and higher-than-expected costs in Latin America, where the company has been consolidating its Brazilian operations.
MRC