Bayer lowers outlook for 2018 in reaction to weak Q1 earnings

MOSCOW (MRC) -- German chemicals manufacturer Bayer has lowered its financial outlook for 2018 in reaction to unexpectedly weak earnings during the first quarter (Q1) of the year, said Xinhuanet.

Bayer recorded a decline in Q1 revenue by 5.6 percent to 9.14 billion euros (10.96 billion U.S. dollars) while operating profits fell by around five percent to 2.9 billion euros during the same period. As a consequence, the Leverkusen-based company now also expects to experience a slight decline in annual revenue, as well as annual earnings before interest, taxes, depreciation and amortization (EBIDTA) in 2018.

Earlier, the Dax-listed company had informed shareholders that it expected to at least maintain the levels of revenue and EBIDTA achieved in 2017 throughout the current year.

Bayer explained on Thursday that the deterioration in its financial position was mainly due to adverse currency effects. Resulting higher costs associated with production, research, development, marketing and sales weighed on the company's performance across diverse divisions.

The company's business with pharmaceuticals, prescription free health products and agrochemicals were all considerably weaker in Q1 2018 compared to the same period last year. The pharmaceuticals unit hereby witnessed its first quarterly decline in nearly four years.

In spite of the disappointing quarterly earnings figures, chief executive officer (CEO) Werner Baumann said that his company was progressing successfully towards the achievement of its larger strategic goals. According to Baumann, Bayer had made "good progress" in the widely-publicized acquisition of U.S. agrochemical company Monsanto for 62.5 billion euros.

The CEO expressed confidence that the regulatory approval of U.S. antitrust authorities for the deal would be obtained shortly, enabling Bayer to finalize the merger with Monsanto by the end of the second quarter (Q2) of 2018. European Union (EU) competition authorities have recently given the greenlight to Bayer's sale of its own crop science unit to German chemical industry rival BASF, removing one significant potential obstacle to the conclusion of the Monsanto takeover.

Founded in 1863, is one of the world's largest chemicals manufacturers and employs over 99,000 staff across the world. The publicly-listed company recorded annual gross revenue of 35 billion euros in 2017.
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MOSCOW (MRC) -- Iraq has signed a contract with two Chinese companies, PowerChina and Norinco International, to build an oil refinery at the port of Fao on the Gulf, an Iraqi oil official said, as per Hydrocarbonprocessing.

The refinery in Fao will have the capacity to produce 300,000 barrels per day and will include a petrochemical plant, he told Reuters, saying the agreement was signed on Saturday in Iraq.

The Fao refinery south of Basra is one of several Iraq plans as it seeks by Iraq to become self-sufficient in oil products.

Iraq is OPEC's second-largest oil producer, after Saudi Arabia. Its refining capacity was curbed when Islamic State overran its largest oil processing plant in Baiji, north of Baghdad, in 2014.

Iraqi forces recaptured Baiji in 2015 but it sustained heavy damage in the fighting. The country now relies on the Doura refinery in Baghdad and the Shuaiba plant in the Basra region.
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MOSCOW (MRC) -- Keiyo Ethylene is in plans to take its naphtha cracker off-stream for a maintenance turnaround, as per Apic-online.

A Polymerupdate source in Japan informed that the cracker is likely to be shut for turnaround on May 13, 2018. The planned maintenance is expected to remain in force until early-July 2018.

Located at Ichihara in Chiba prefecture of Japan, the cracker has a production capacity of 740,000 mt/year.

As MRC informed before, Keiyo Monomer planned to take its vinyl chloride monomer (VCM) plant off-stream for a maintenance turnaround in February-March 2018. The exact date and duration of the shutdown could not be ascertained. Located in Chiba, Japan, the plant has a production capacity of 200,000 mt/year.

Founded in 1991, Keiyo Ethylene Co. Ltd. produces and sells petrochemical products. The Company produces ethylene, propylene, and other petrochemical products.
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MOSCOW (MRC) -- PKN Orlen, Poland’s largest fuel company has signed an annex to the long-term agreement with the Saudi Aramco oil company, increasing oil supplies by 100,000 metric tonnes per month, reported Polandatsea with reference to the Polish company's statement.

Under the new conditions, the Orlen Group refineries will receive about 300,000 tonnes of oil every month from the Persian Gulf, which means over 20 percent of the raw material for Orlen refineries will come from Saudi Arabia. Under the new terms, the contract with Saudi Aramco will be implemented from May 1 to December 31, 2018, and has an option to extend it for the years to come.

PKN Orlen said in a press statement, that it intends to use the Saudi oil for processing at its refineries in Poland, the Czech Republic and Lithuania.

"PKN Orlen’s management has been consistently implementing a policy of diversification of its raw material supply", said Daniel Obajtek, CEO of PKN Orlen. "The increased imports from Saudi Arabia are the next step in this strategy. The oil from Saudi Arabia is of good quality, which guarantees a high yield of products received from the oil refining process", he pointed out.

PKN Orlen also imports crude oil from Norway, the United Kingdom, Iran, Nigeria, Venezuela and the United States. Thanks to the diversification strategy, currently 30 percent of all oil imports come from other suppliers than Russia.

As MRC wrote previously, in May 2016, PKN ORLEN signed a contract with Saudi Aramco for the supply of ca. 200 thousand tonnes of crude oil monthly to its refineries. The contract was effective from May 1st to December 31st 2016, with an option of automatic renewal for successive years. The oil is to be processed by all PKN ORLEN's refineries in Poland, the Czech Republic and Lithuania.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.

PKN Orlen is a major Polish oil refiner and petrol retailer. The company is a significant European publicly traded firm with major operations in Poland, Czech Republic, Germany, and the Baltic States. It currently (2015) ranks 353, with a revenue of over USD33.8 billion.
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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 polycarbonate (PC) grades, as per the company's press release.

Effective May 1, 2018, or as existing contract terms allow, the contract and spot prices for the products listed below rose as follows:

- CALIBRE PC resins - by EUR70 per metric ton.

As MRC informed before, Trinseo last raised its prices for PC grades on 1 February 2018, as stated below:

- CALIBRE PC resins - by EUR150 per metric ton.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's 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 USD4.4 billion in net sales in 2017, with 16 manufacturing sites around the world, and approximately 2,200 employees.
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