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Clariant sales, EBITDA decline on lower volumes, currency effects

October 30/2020

MOSCOW (MRC) -- Clariant says its third-quarter sales declined 14% year on year (YOY) to 893.0 million Swiss francs (USD979.5 million) due to lower volumes and negative currency effects that also squeezed profitability, with EBITDA for the period lower by 16% YOY, to SFr127 million, according to Chemweek.

The companys EBITDA margin recorded a slight YOY decrease of 0.3 percentage points, to 14.2%. Net profits have not been disclosed.

Clariants care chemicals and catalysis businesses recorded higher EBITDA margins due to more favorable product mixes, cost mitigation, and efficiency improvement, the company says. Natural resources posted a lower EBITDA margin, mainly due to lower volumes in industries affected the most by COVID-19 such as automotive, textiles, and oil, the company says.

Clariant expects third-quarter sales to be the lowest of the first three quarters of 2020. Its natural resources business was affected the most, with all three segments of the business impacted negatively by oversupply in oil markets and the pandemic. Sales in care chemicals and catalysis softened only slightly, it says.

Natural resources' EBITDA fell 38% YOY, to SFr44 million on 22% YOY lower sales, to SFr356 million, due to lower volumes resulting from weaker demand, especially in the oil and mining services segment. Care chemical sales decreased 9% YOY, to SFr330 million, but EBITDA increased 16% YOY, to SFr72 million, due to performance measures and a favorable product mix, the company says. Sales of Clariant's catalysis business were 9% lower YOY, to SFr207 million, and EBITDA decreased 5%, to SFr42 million. 

Over the first nine months of 2020, we successfully upheld the profitability of our continuing operations despite an exceedingly challenging environment. Although the COVID-19 pandemic had a significant negative impact on several of Clariants key end markets in the third quarter, the performance resilience clearly validates the success of our strategic focus on the three core specialty business areas, says Hariolf Kottmann, executive chairman ad interim at Clariant.

Clariant anticipates that the COVID-19 pandemic will have a continued, but slightly less negative impact on sales and profits in the fourth quarter of 2020 compared with the third quarter. The company says it will continue with its performance programs to achieve above-market growth, higher profitability, and stronger cash generation in the midterm.

Clariant says it will also continue its transformation program, which has reshaped the company's portfolio through the divestment of healthcare packaging in October 2019 and masterbatches in July 2020, and that it is progressing with the planned divestment of pigments while preparing the rightsizing of the organization.

As MRC reported before, earlier this month, Clariant (Muttenz, Switzerland) announced the construction of a new state-of-the-art catalyst production site in China. This project represents a significant investment which further strengthens Clariants position in China and enhances its ability to support its customers in the countrys thriving petrochemicals industry.

The new facility will be primarily responsible for producing the Catofin catalyst for propane dehydrogenation, which is used in the production of olefins such as propylene. Thanks to its excellent reliability and productivity, Catofin delivers superior annual production output compared to alternative technologies, resulting in increased overall profitability for propylene producers, says the company. Construction at the Dushan Port Economic Development Zone in Jiaxing, Zhejiang Province was scheduled to commence in Q3 2020, and Clariant expects to be at full production capacity by 2022.

Propylene is the main feedstocks for the production of polypropylene (PP).

According to MRC's ScanPlast report, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.


mrcplast.com
Author:Margaret Volkova
Tags:PP, PP random copolymer, propylene, petrochemistry, adhesives, masterbatches, Clariant International, China, Russia, Switzerland.
Category:General News
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