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Ferro swings to loss as COVID-19 reduces volumes

August 05/2020

MOSCOW (MRC) -- Ferro has reported a second-quarter net loss of USD5.5 million, compared with a profit of USD10.9 million in the year-ago quarter. Net sales fell 21.5% year-on-year (YOY), to USD204.8 million, reported Chemweek.

Adjusted earnings totaled 12 cents/share, slightly ahead of analysts consensus estimate of 11 cents/share, as reported by Refinitiv (New York, New York). Profit margins improved during the quarter, while volumes fell by 20% YOY.

Our second quarter performance, although down from last year, was in line with our expectations and, as we moved through the quarter, established what we see as a trend of meaningful improvement from the macro-economic low point, says Ferro chairman and CEO Peter Thomas. Order patterns in the later part of the quarter showed our customers beginning to have more visibility into their business needs for the second half of 2020, and we now expect the third quarter to track in the same favorable direction that we experienced coming out of the second quarter.

Functional coatings segment net sales were down 19.6% YOY, to USD131.7 million, while segment gross profit fell 26.7%, to USD36.1 million. Color solutions segment sales declined 24.8% YOY, to USD73.1 million, while segment gross profit was down 9.1%, to $27.0 million.

As MRC informed before, on October 14, 2016, Ferro signed a definitive agreement to acquire 100% of the stock of Belgium-based Cappelle Pigments for EUR50.5 million (approximately USD56 million) on a cash-free and debt-free basis.

We remind that Braskem USA is planning to start up its new polypropylene (PP) plant in the third quarter this year. Based in La Porte, Texas, United States, the plant has a production capacity of 450,000 tons/year. The new PP plant is known as the Delta project, which costs investment of USD675 million and the construction has begun since 2017.

According to MRC's DataScope report, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Ferro Corporation is a leading global functional coatings and color solutions company that supplies technology-based performance materials, including glass-based coatings, pigments and colors, and polishing materials. Ferro products are sold into the building and construction, automotive, appliances, electronics, household furnishings, and industrial products markets. Headquartered in Mayfield Heights, Ohio, the Company has approximately 4,900 employees globally.
Author:Margaret Volkova
Tags:PP, homopolymer PP, coatings, car components, construction, electrical goods, paints and coatings, Braskem, Ferro Corporation, Russia, USA.
Category:General News
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