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Hexpol profits grow on cost-reduction efforts

February 01/2021

MOSCOW (MRC) -- Hexpol (Malmo, Sweden), a polymer compounder, says its net profit for the fourth quarter increased 36% year on year (YOY), to 456.0 million Swedish krona (US54.7 million), despite sales declining 9.8% YOY, to SKr3.40 billion, reported Chemweek.

Hexpol says that sales were impeded by negative currency effects, but volumes continued to increase during the fourth quarter compared with previous quarters of 2020, as well as compared with the corresponding quarter of 2019. EBIT increased 47% YOY, to SKr622 million supported by the companys efforts to reduce direct and indirect costs during the quarter, Hexpol says.

The compounding business of Hexpol, which accounted for 93% of the companys total sales in 2020, posted fourth-quarter revenue down 10% YOY, to SKr3.16 billion, due to negative currency effects and the impact that COVID-19 had on the businesss customers, the company says. However, Hexpol says that during the fourth quarter we saw a clear improvement compared to the previous quarter in demand and increased volumes from especially the automotive industry but also from the building and construction industry. Compounding EBIT increased 47% YOY, to SKr580 million.

The companys engineered products sales amounted to Skr243 million, level with the corresponding quarter of 2019. The businesss sales were reduced by COVID-19, but to a lesser extent than for compounding. Its EBIT increased 45% YOY, to SKr42 million.

The uncertainty going forward remains high, with restrictions and shutdowns, due to the COVID-19 pandemic. However, we believe that our strong customer focus in combination with our geographical closeness to our customer gives us opportunities to further build our market position. We also generate a very good cash flow, which strengthens our already strong financial position and gives us good conditions for continued growth and intensified acquisition agenda, says Georg Brunstam, president and CEO of Hexpol.

As MRC informed before, in December 2019, polymer compounder Hexpol TPE, which has UK operations in Manchester, launched a new range of materials intended for cable sheathing applications in such sectors are telecommunications and electricity delivery.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1%  year on year.

Hexpol is a world-leading polymers group with strong global market positions in advanced polymer compounds (Compounding), gaskets for plate heat exchangers (Gaskets) and wheels made of plastic and rubber materials for forklifts and castor wheel applications (Wheels).


mrcplast.com
Author:Margaret Volkova
Tags:propylene, ethylene, compounding, electrical goods, Hexpol, UK, Russia, Sweden.
Category:General News
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