MOL Q1 profit jumps as downstream business shines

MOSCOW (MRC) -- Hungarian oil and gas group MOL posted a 165 percent jump in first-quarter net profit, the company said on Friday, as a strong performance in its downstream business offset declines in upstream profits, said Reuters.

The company, which operates refineries in Hungary, Slovakia and Croatia, said net profit rose to 77.2 billion forints (USD282 million) from 29.2 billion forints in the same period last year.

"Downstream posted record high first-quarter results supported by an outstanding petrochemical contribution, offsetting the decline in Upstream profits," MOL Chairman and Chief Executive Zsolt Hernadi said.

Core profit, or so-called clean EBITDA (earnings before interest, taxes, depreciation and amortisation), dropped 8 percent year on year to 144.4 billion forints.

MOL was "well on track" to meet its EBITDA target of around USD2 billion for 2016, Hernadi said in an earnings statement. MOL's full-year EBITDA came in at USD2.5 billion in 2015.

MOL, which has exploration and production assets in the North Sea, said its E&P business recorded a 30 percent annual decline in EBITDA to 42.2 billion forints in the first quarter due to low oil and gas prices, which was only partly offset by growing output.

The company, with exploration and production assets in countries including Pakistan, Iraq and Russia, has said it would cut upstream operational costs by between USD80 million and USD100 million in 2016.

In the fourth quarter of 2015, the company booked write-downs of USD1.7 billion on its upstream assets, mostly due to low oil prices, squeezing the company into a net loss of 433.9 billion forints for that period.

Its downstream segment delivered a record-high EBITDA of 92.9 billion forints for the first quarter, growing 22 percent in annual terms, boosted by high petrochemicals margins.

MOL's production rose 8.5 percent to 112,100 barrels per day from the same period last year.

As MRC informed earlier, MOL Hungarian Oil and Gas Public Limited Company hereby informs the capital market participants that it has reached an agreement with JSR Corporation (JSR) to establish a joint venture in Hungary and construct a new plant to manufacture solution polymerization styrene-butadiene rubber (S-SBR).
MRC

MOSCOW (MRC) -- Evonik Industries AG is acquiring the Specialty & Coating Additives business (Performance Materials Division) of the US company Air Products and Chemicals, Inc. for 3.8 billion US dollars (approx. EUR3.5 billion), strengthening its leading position on the high-margin specialty & coating additives market, said the producer on its site.

The transaction is intended to be completed by the end of the year. It is expected that the acquisition will be EPS accretive for Evonik in the 2017 business year.

Klaus Engel, CEO of Evonik Industries AG, said: "Evonik is already one of the leading producers of specialty & coating additives. Air Products’ Specialty & Coating Additives business perfectly complements this fast-growing segment. With this acquisition we are expanding our portfolio with precisely the right markets, products and innovations and continuing to invest in our growth and profitability."

With its own strategic reorganization and creation of three independent operational segments in 2015, Evonik established the right conditions for integrating major acquisitions. As such, Air Products’ Specialty & Coating Additives business can be rapidly integrated into the growth segments Nutrition & Care and Resource Efficiency. The combined specialty & coating additives business has a turnover of around EUR3.5 billion and an attractive EBITDA margin of more than 20%. At the same time, Evonik is further strengthening its leading position in rapidly growing, highly profitable markets with strong differentiation from competitors and low dependence on commodity prices.

With their products and their strong positions in the key global markets, Evonik and the newly acquired business are highly complementary. Their specialty & coating additives add critical and highly valuable characteristics to their customers’ products. The two businesses serve three particularly attractive, rapidly growing core markets: coating and adhesive additives, high-value PU foam additives, and specialty surfactants for industrial and institutional cleaning. They target the same end customers, but with different and complementary products. For instance, Evonik is a leader in PU foam stabilizers while the Specialty & Coating Additives business of Air Products is well positioned in PU foam catalysts. Demand for these products is rising strongly, and the market for these additives will grow far more quickly than overall demand for chemical products.

Geographically, Evonik and the acquired division also complement each other. While the focus of the Air Products’ business is on North America and Asia, Evonik is particularly strong in Europe. With the current acquisition, Evonik is crucially boosting its standing in the North American market, allowing it to serve the increasingly global activities of its customers even more effectively. At the same time, by growing in North America and Asia, Evonik is reducing its dependence on the European market and therefore better protecting its own business against economic fluctuations in individual regions.

The planned acquisition remains subject to formal approvals from the relevant antitrust authorities.

As MRC informed earlier, in June 2015, Evonik Industries completed the acquisition of Monarch Catalyst (Dombivli, India). Evonik announced plans to acquire Monarch Catalyst in March, subject to certain closing conditions. The company employs approximately 300 people and will be renamed Evonik Catalysts India. All of Evonik’s future catalyst activities in India will be operated through the newly acquired company. Financial details of the transaction were disclosed.

Evonik, the creative industrial group from Germany, is one of the world leaders in specialty chemicals. Its activities focus on the key megatrends health, nutrition, resource efficiency and globalization. Evonik benefits specifically from its innovative prowess and integrated technology platforms. Evonik is active in over 100 countries around the world.
MRC

MOSCOW (MRC) -- Trinseo S.A., a global materials solutions provider and manufacturer of plastics, latex binders and synthetic rubber has announced the final results of its tender offer, in which Trinseo offered to purchase up to 1,165,000 of its ordinary shares at a price of USD35.63 per share on the terms and subject to the conditions set forth in the Offer to Purchase, as per the company's press release.

In accordance with the terms and subject to the conditions of the offer, Trinseo has accepted for purchase 38,702 of its ordinary shares at a price of USD35.63 per share, for a total purchase price of USD1,378,952.26.

The company conducted the tender offer in order to satisfy certain requirements of Luxembourg law following the repurchase by the Company of 1,600,000 ordinary shares as part of the secondary offering of the company’s ordinary shares that was completed on March 24, 2016.

As MRC reported earlier, in May 2016, Trinseo and its affiliate companies in Europe increased prices of all polystyrene (PS), ABS and SAN grades. Thus, the May contract and spot prices for the products listed below rose as follows:

- STYRON general purpose polystyrene grades (GPPS), STYRON and STYRON A-TECH high impact polystyrene grades (HIPS) - by EUR25 per metric ton;
- MAGNUM ABS resins - by EUR35 per metric ton;
- TYRIL SAN resins - by EUR20 per metric ton.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. TrinseoпїЅs technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD4.0 billion in revenue in 2015, with 18 manufacturing sites around the world, and more than 2,200 employees.
MRC

MOSCOW (MRC) -- Braskem’s consolidated net income in the first quarter of the year totaled 747 million reais (USD210.6 million), up from R 206 million one year earlier, said Chemweek.

The company's consolidated Ebitda was R3.06 billion, more than doubling year-on-year (YOY). In dollar terms. Ebitda amounted to USD780 million, up 54% YOY. Several factors contributed to the improved performance including higher total sales volume as well as better price spreads for basic petrochemicals including polypropylene (PP) in the United States and Europe, the company says. Net revenue during the quarter was up 19%, to R12.2 billion, driven by an average 37% YOY depreciation of the Brazilian currency, and higher resin export volumes, Braskem adds.

The average international spread for the resins produced by Braskem in Brazil in the first quarter was USD616/m.t., down 7% YOY, with higher spreads for all resins. For key basic petrochemicals, the average spread in the quarter was USD342/m.t., up 16% YOY, driven mainly by the spreads for benzene and para-xylene.

Net revenue of the company’s Brazilian operations—consisting of basic petrochemicals, polyolefins, vinyls, and chemical distribution—was R12 billion, up 14% YOY and representing 83% of Braskem's consolidated segments. Steam crackers operated at an average capacity utilization rate of 89%. Meanwhile, Braskem's European and US activities posted a combined net revenue of USD648 million, up 6% YOY. Consolidated revenue from overseas markets—principally sales generated in the United States and Europe, and exports from Brazil—excluding resales of naphtha and condensate, totaled R5 billion, or 44% of Braskem’s total revenue.

Braskem plans to invest R3.66 billion this year. About 49% of the funds allocated to operational investments include R1.6 billion in Brazil and USD48 million in the United States and Europe. A futher 32%, or USD329 million, of this investment budget is earmarked for the Braskem-Idesa joint venture. The jv registered an important milestone in the first quarter with the start-up of the Ethylene XXI cracker and production of the jv's first lot of polyethylene (PE). The jv started producing on-specification PE on 26 March and a second line came onstream on 28 April. The remaining 15% of the budget, or R537 million, will contribute to funding initiatives such as a previously announced feedstock-flexibility project at the Bahia, Brazil, cracker and improvement of industrial productivity at PP plants in the United States and Europe. Braskem, meanwhile, has signed a 15-year, propylene-supply agreement with Enterprise Products Partners (Houston) that will meet about 16% of Braskem's US and European propylene requirements from 2017.

Braskem says it will continue to implement its cost-cutting program, with potential recurring annualized savings of R400 million, the benefits of which should be fully attained in 2017.

Braskem is Brazilian main producer of polyethylene and polypropylene. In addition with ongoing plants located in both petrochemical complexes, in April 2008 Braskem opened a 300,000 metric ton polypropylene plant in the city of Paulinia (Sao Paulo).
MRC

MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex binders and synthetic rubber, and its affiliate companies in Europe have announced price increases for all polystyrene (PS), ABS and SAN grades, as per the company's statement.

Effective immediately, or as existing contract terms allow, the May contract and spot prices for the products listed below will increase as follows:

- STYRON general purpose polystyrene grades (GPPS), STYRON and STYRON A-TECH high impact polystyrene grades (HIPS) - by EUR25 per metric ton;
- MAGNUM ABS resins - by EUR35 per metric ton;
- TYRIL SAN resins - by EUR20 per metric ton.

As MRC reported earlier, Trinseo and its affiliate companies in Europe last announced price increases for all PS, ABS and SAN grades in April 2016. Thus, the April contract and spot prices for the products listed below increased as follows:

- STYRON GPPS, STYRON and STYRON A-TECH HIPS - by EUR105 per metric ton;
- MAGNUM ABS resins - by EUR120 per metric ton;
- TYRIL SAN resins - by EUR95 per metric ton.

In March 2016, the price rise was as follows:

- STYRON GPPS grades, STYRON and STYRON A-TECH HIPS grades - by EUR100 per metric ton;
- MAGNUM ABS resins - by EUR70 per metric ton.

Formerly known as Styron, Trinseo has completed the name change process for most legal entities around the world. Some Styron companies are still completing this process and will continue to do business as Styron until their respective name changes are complete.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. TrinseoпїЅs technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD4.0 billion in revenue in 2015, with 18 manufacturing sites around the world, and more than 2,200 employees.
MRC