Total profit down 30% on oil slump, revenue fall

МOSCOW (MRC) -- Total SA said its profitability fell again in the second quarter as revenue from its refineries and petrochemical plants deteriorated and oil price remained stubbornly low though not as steeply as expected, said Marketwatch.

Total said net profit fell 30% to USD2.09 billion in the second quarter from the same period a year ago while revenue contracted 17% to USD37.22 billion. When adjusted to exclude the effect of inventories and other nonrecurring items, the company's net profit fell to USD2.17 billion down from USD3.09 billion in the same quarter a year ago.

The adjusted profit data was higher than the USD1.89 billion median forecast of 11 analysts polled by FactSet.

Despite cost-cutting efforts by the company and its scrambling to extract more oil from existing fields to boost revenue, Total's profitability has continually shrunk since mid-2014 when oil prices collapsed. The company had managed to keep from plunging too deep into the red thanks to favorable conditions on the market of refined products, which has deteriorated this year.

Still, Total is optimistic as oil price has risen a third in the second quarter from the previous three-month period and refining margins remained stable.

The company expects to cut costs by more than the USD2.4 billion originally targeted, it said.

As MRC informed earlier, Total says that the EUR950 million (USD1.1 billion) public tender offer it launched for battery major, Saft (Bagnolet, France) in May resulted in Total acquiring 90.14% of the capital and voting rights of Saft Groupe, based on the total number of shares outstanding as of 12 July 2016.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
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Clariant H1 profit declines

MOSCOW (MRC) -- Clariant, a world leader in specialty chemicals, today announced first half 2016 sales of CHF 2.899 billion compared to CHF 2.871 billion in 2015. This corresponds to a 3 % growth in local currency driven by higher volumes, said the company on its site.

Growth was strongest in Latin America, where sales grew by 10 % in local currency. In the Middle East & Africa, year-on-year sales were up 7 % in local currency. North America saw a small decline of 2 % coming from a lower demand in Catalysis and Natural Resources, while Asia grew at 2 %, with more stability in China, and Europe at 1 % driven by volume increases.

The improved business performance in the first half year primarily stemmed from higher growth in Care Chemicals and Plastics & Coatings. In Care Chemicals, sales in local currency increased by 5 % to CHF 750 million. Sales in Catalysis showed a decline of 9 % in local currency, reaching CHF 285 million due to a lower demand in different regions particularly in China.

Despite the difficult market environment, sales in Natural Resources were stable in local currency and amounted to CHF 557 million. There was a slight decline in Oil and Mining Services, whereas Functional Minerals continued to grow. In Plastics & Coatings, sales in local currency grew by 5 % to CHF 1.307 billion. The good sales performance in Plastics & Coatings was seen across all regions.

The EBITDA before exceptional items increased by 9 % in local currency and reached CHF 444 million, compared to CHF 417 million in the previous year. Major contributors to the profitability improvement were Care Chemicals and Plastics & Coatings.

The corresponding EBITDA margin before exceptional items of 15.3 % was significantly above the previous year's level of 14.5 %. Care Chemicals, Natural Resources and Plastics & Coatings all substantially improved EBITDA margins before exceptional items year-on-year. Catalysis was below the previous year's level largely due to portfolio mix effects.

Net income amounted to CHF 128 million compared to CHF 143 million in the previous year mainly reflecting higher restructuring costs. When adjusted for the proceeds from the sale of the energy storage business in the first half of 2015, net income was comparable to the previous year figure.

Operating cash flow significantly improved to CHF 208 million versus CHF 65 million in the previous year reflecting Clariant's priority to increase operating cash flow in 2016.

Net debt was CHF 1.526 billion compared to CHF 1.312 billion recorded at year-end 2015. The gearing increased to 65 % from 53 % at the end of 2015 mirroring the usual seasonal increase in the first half of the year.

As MRC informed earlier, in February 2016, Clariant Masterbatches Saudi Arabia, a joint venture (JV) between Clariant and Rowad National Plastic Company, started construction of a new masterbatch production unit in Yanbu, Saudi Arabia.
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Huntsman to include textiles, pigments and additives in TiO2 spinoff

MOSCOW (MRC) -- Huntsman Corporation (The Woodlands, Texas) will include textile effects and the balance of its pigments and additives segment in the spinoff of its titanium dioxide (TiO2) business, said Chemweek.

President and CEO Peter Huntsman announced the plan during the company’s second-quarter earnings call on 27 July company plans to spin off its specialty chemical business - rather than sell it - and create a new publicly traded company by early next year.

After debating for many months which route to take, CEO Peter Huntsman said now that the struggling pigments and additives business is becoming profitable again - "back in the black" - his company can gain more value by spinning off the unit and selling shares than by selling it outright. The new company would focus specifically on titanium dioxide chemical, called TiO2, which is used as a pigment for everything from food coloring and paints to coatings and sunscreen.

"A spin allows us to have a process that we can control," Huntsman said, noting that shareholders should benefit. "This is something that has greater certainty behind it."

Huntsman has sought to unload, or at least distance itself, from the titanium dioxide business because its poor performance has weighed on Huntsman's stock price.

As MRC informed earlier, last year Huntsman planned to reduce its titanium dioxide (TiO2) capacity by approximately 100,000 tons, representing 13% of Huntsman's European TiO2 capacity.

Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated chemicals with 2013 revenues of over USD11 billion. Huntsman is a global manufacturer and marketer of differentiated chemicals. The company's operating companies manufacture products for a variety of global industries, including chemicals, plastics, automotive, aviation, textiles, footwear, paints and coatings, construction, technology, agriculture, health care, detergent, personal care, furniture, appliances and packaging.
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Mexichem reported Q2 2016 results

MOSCOW (MRC) -- Mexichem, Mexican PVC and specialty chemicals maker, has announced its unaudited results for the 2Q16. Reported EBITDA including USD286 million in one-time charges (USD244 million non-cash) related to PMV?s VCM plant, was negative USD29 million. Adjusted EBITDA which excludes this effect was USD256 million, as per BusinessWire.

The company's consolidated Adjusted EBITDA margin expanded over 46 bps to 17.9%, reflecting significantly higher margins in: Vinyl: Resins, Compounds and Derivatives EBITDA margin rebounded by 120 bps to 15.0%.

Net majority loss including the one-time charges of was USD33 million; adjusted net majority income increased 34% to USD86 million, representing an adjusted ROE of 6.2% and an adjusted ROIC of 6.3%.

On a constant currency basis, total sales and adjusted EBITDA would have been USD45 million and USD15 million higher, respectively.

Company on track to reach guidance of approximately USD900 Million in EBITDA for 2016.

Mexichem's H1 2016 financial and operating results are as follows: reported EBITDA including USD286 million in one-time charges (USD244 million non-cash) related to PMV?s VCM plant was USD171 million; adjusted EBITDA was SD457 million; net majority income was USD18 million, and adjusted net majority income increased by 65% to USD137 million; on a constant currency basis, total sales and adjusted EBITDA would have been USD167 million and USD43 million higher, respectively.

As MRC informed earlier, Mexichem completed the acquisition of Vestolit GmbH on 1 December 2014. Mexichem completed the acquisition after receiving all relevant regulatory approvals. Vestolit was acquired from funds managed by Strategic Value Partners LLC for a total purchase price of EUR219 million in cash and assumed liabilities.

Mexichem, of Tlalnepantla, an industrial municipality close to Mexico City, is Latin AmericaпїЅs largest manufacturer of PVC pipe, vinyl resins and compounds. The company has annual revenues of more than USD5 billion and has been listed on the Mexican Stock Exchange for more than 30 years.
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Technip swings to Q2 net profit of EUR123.3m

MOSCOW (MRC) -- Paris-based LNG engineer Technip posted a 9.2 percent lower second-quarter revenue due to the oil and gas industry downturn, said Lngworldnews.

Technip’s adjusted revenue stood at 2.81 billion euros (USD3.12 billion) in the second quarter of 2016, as compared to 3.1 billion euros in the same period the year before.

However, due to "solid" second-quarter results, the engineering company’s plans to cut spending in a low oil price environment were "ahead of schedule."

"Our cost reduction program is ahead of schedule and expected to deliver 900 million euros already by 2016, demonstrating our ability to build a leaner business faster," said Thierry Pilenko, Chairman and CEO of Technip.

During the second quarter, Technip’s order intake was 1.5 billion euros, in line with the previous year.

The rise in the oil price and the deflation across the supply chain in oil and gas has seen market participants plan for long term. However, Technip still expects a slow rate of new orders for some time as the competitive pressure across the industry continues.

Earlier in May Technip and FMC Technologies agreed to merge combining the two in an all-stock transaction. Technip noted in its report the merger is on track and during June, the two companies signed the official merger agreement and received the conclusion of the U.S. antitrust review.


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