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Cepsa chemicals earnings rise on higher margins

November 24/2020

MOSCOW (MRC) -- Cepsa (Madrid, Spain) has reported a 50% rise year on year (YOY) in third quarter clean EBITDA for its chemicals business to EUR92 million (USD109 million), also up 7% sequentially from the second quarter, due mainly to higher margins in its linear alkylbenzene (LAB) segment and a rebound in phenol/acetone margins, said Chemweek.

The improvement in the quarter was driven by the "strong performance" of LAB, currently in high demand as a raw material for detergents given the COVID-19 pandemic, and higher margins in all business lines, it says. Chemical product sales volumes were down 4% YOY at 693,000 metric tons, but up slightly on the second quarter.

LAB sales volumes at 178,600 metric tons were up slightly on the prior-year period and the second quarter, but registered higher margins, “especially the Spanish and Canadian plants,” Cepsa says. Product sales volumes in the phenol/acetone segment of 369,500 metric tons were 8% lower YOY and 3% down on the second quarter, impacted by a decrease in global demand due to the pandemic, although margins improved. Sales of solvents were flat YOY at 144,700 metric tons and up 8% sequentially, also with better margins, it adds.

Growth capital expenditure (capex) in the third quarter totaled ˆ8 million, mainly on the revamping of the company’s LAB plant at Puente Mayorga, Spain.

The company’s chemical business performed “extremely well, proving to be resilient in the most adverse scenarios, and highlighting the importance and benefits of diversification in the current macroeconomic context,” Cepsa says. Despite its refining business remaining under pressure with European margins at recent record lows, the strategic locations of its refineries, their operational flexibility and strong integration with the chemicals and marketing businesses “provides greater optionality to optimize margins and mitigate exposure to the Iberian market,” it says.

Cepsa’s group clean EBITDA of EUR277 million for the third quarter was down 51% YOY but an improvement of 54% over the second quarter of this year. Clean net income on a current cost of supply basis was EUR39 million, plunging 77% compared to the prior-year period but swinging from a loss of EUR93 million in the second quarter.

As MRC informed earlier, Cepsa (Madrid, Spain) reports a 30% rise year on year (YOY) to EUR86 million (USD101 million) in clean EBITDA on a current cost of supply (CCS) basis for its chemicals business in the second quarter, due to a rebound in margins and volumes in the phenol/acetone segment and “high demand” in the detergents sector.

According to MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to/from Belarus) rose in the first three quarters of 2020 by 32% year on year to 75,600 tonnes  (57,200 tonnes a year earlier).
Author:Anna Larionova
Tags:bisphenol A, PK, PC granules, PC compounds, phenol, Cepsa.
Category:General News
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