Marubeni halves profit outlook on oil price slide, Gavilon

MOSCOW (MRC) -- Japanese trading house Marubeni Corp reduced its full-year net profit projections by a half on Monday citing write-downs caused by plunging commodities prices, said Binarytribune.

Like international oil majors and mining companies, Japan's trading companies have been caught flat-footed by the rout in commodities, with oil down as much as 60 percent and copper falling about 25 percent since the middle of last year.

The trading house said it would consolidate business divisions and strengthen oversight to catch risks early, but would continue to seek out investment opportunities.

"We did not expect (crude oil prices) would fall below USD45. There is no mistake that this was quite different from our earlier outlook," Marubeni President Fumiya Kokubu told reporters at a hastily called news conference.

In addition, the trader revealed a goodwill impairment loss of approximately Y50bn related to its acquisition of Idaho-headquartered fertilizer and grain merchant Gavilon. "The performance of Gavilon for the current fiscal year is expected to fall short of the initial business plan, as was the case in the previous fiscal year," Marubeni disclosed.

As MRC wrote before, Marubeni Corporation concluded an off-take agreement with Nghi Son Refinery and Petrochemical Limited Liability Company, the operator of the Nghi Son Refinery & Chemical Complex in Vietnam, for its products, namely polypropylene and sulfur.

Marubeni is delighted to be a support of the first Japanese-owned refinery & chemical complex located outside of Japan in terms of stable operations by committing to long-term off-taking and is willing to continue its contribution to the emerging Vietnamese economy for further development.

MRC

MOSCOW (MRC) -- Austrian energy group OMV will take a 700 million euro (USD790.5 million) charge in the fourth quarter. The investment curbs due to low oil prices and uncertainty in Libya would prevent it from reaching its 2016 output target, said Reuters.

This year will be even tougher for OMV than a difficult last quarter in 2014 as a slump in oil prices has pushed the oil and gas group to slash its investment plans. OMV is reducing its annual investment to 2.5-3 billion euros from 3.9 billion euros (USD4.4 billion) and further investment reductions are possible if the oil price stays low at around USD50 per barrel.

"Net special charges of approximately 700 million euros were recorded in the operational result for the quarter, mainly due to impairments in Petrol Ofisi and in the power business of OMV Petrom," it said in a trading statement.

"While we remain committed to the major projects expected to contribute to our previously stated 2016 production target of around 400,000 kboe/d, the changes to the investment program will inevitably lead to a delay in reaching this production level," it said.

The contribution to OMV's results of Austrian petrochemical producer Borealis – of which OMV is a 36% stakeholder – fell on a quarter on quarter basis, mainly driven by a lower result from the Abu Dhabi-based Borouge business, the company also said.

OMV also said in the trading statement that in order to "reflect the significant decline of the oil price together with the unpredictability of our Libyan production, we have scaled back our investment program".

“The latest expenditure for the average Group CAPEX for the period 2015-2017 is EUR2.5-3bn per annum (the lower end of the range represents an oil price assumption of approximately USD50/bbl going forward for the next three years) with roughly 80% being directed to Upstream," the company said.

OMV is an integrated international oil and gas company, headquartered in Vienna. Its main businesses are exploration and production of oil and gas, natural gas distribution and power generation, and refining and marketing oil products. OMV is the largest listed manufacturing company in Austria.MRC

MOSCOW (MRC) -- Last year's imports of suspension polyvinyl chloride (SPVC) to Russia decreased by 21% to 282,400 tonnes. The main reasons for lower imports were stronger domestic production and a fall in demand for finished products from PVC, according to MRC DataScope.

December SPVC imports to the Russian market fell to 3,700 tonnes on the back of seasonally weaker demand and the accelerating devaluation of the rouble versus 8,700 tonnes a month earlier. The overall SPVC imports to Russia decreased to 282,400 tonnes last year, while this figure was 358,500 tonnes in 2013. Such a major drop in imports was caused by weaker demand for finished products from PVC, as well as the launch of PVC production at RusVinyl, which took place in September.

The structure of Russian SPVC imports by countries looked the following way in 2014.

December imports of acetylene PVC from China fell to 1,600 tonnes from 4,300 tonnes in November. The overall imports of Chinese acetylene resin to the Russian market rose to 175,600 tonnes because of the relatively stable pricing versus 133,600 tonnes a year earlier.

Last month's PVC imports from the United States dropped to 1,600 tonnes on the back of higher export prices and the rouble devaluation on the back of 2,400 tonnes in November. The overall PVC imports to the local market from the US fell to 59,900 tonnes over the stated period, down by 65% year on year. It is also worth noting that with the launch of RusVinyl Russian companies virtually no longer need to purchase North American PVC.

December PVC imports from Europe slumped to less than 500 tonnes. Last year's imports of European SPVC to the Russian market exceeded 33,000 tonnes versus 36,500 tonnes a year earlier.

The further reduction of Russia's dependence on PVC imports is expected this year on the back of the growth of supply from Russian producers, particularly, from RusVinyl, and weaker demand for finished products from PVC.

MRC

MOSCOW (MRC) - Ukrainian market of polycarbonate (PC) was 4,000 tonnes in January-December 2014, down 5% compared with 2013 level, according to MRC DataScope.

At the same time, Ukraine's imports of injection moulding PC granules decreased to 2,000 tonnes in 2014, down 6% year on year. Imports of sheet extrusion PC increased to 733 tonnes in 2014, up 20% year on year. Last year's consumption of bottle grade PC also increased to 709 tonnes, up 15% year on year. The total reduction in consumption resulted from the the weakening of the injection processing sector.

One of the reasons was the reduction of the exports of injection moulding PC, in particular, to Russia because of the complexity of the logistics in the eastern regions, in which military operations are going. Russia is one of the main consumers of injection moulding components for the automotive and mechanical engineering, produced in Ukraine. Besides, because of the general deterioration of macroeconomic indicators in Russia, purchasing activity significantly decreased in the market of finished products.
Ukrainian PC market completely depends on import of European supplies. Domestic PC prices grew on the back of the hryvnya devaluation regardless of the season or buying activity. Importers said they still faced difficulties with buying of the foreign currency for the payments.
Traders prefer to work on a prepaid basis and rarely provide trade credit (usually 30 days).

The introduction of 5% import duty, including for PC, continued to be coordinated with the EU and IMF. The main market players plan to keep last year's consumption in 2015.
Injection moulding and bottle sectors worked stable throughout the year, the activity in sheet extrusion segment will resume from the beginning of spring. Importers have left prices steady for the Ukrainian market, which should have a positive impact on the market.


MRC

MOSCOW (MRC) -- Evonik Jayhawk Fine Chemicals Corporation has announced improvements to JAYHAWK BTDA Ultrapure, a dianhydride co-monomer used in the production of polyimide films, reported the company on its site.

Key applications include flexible circuitry found in smartphones and tablets.

Dr. Jeff Dimmit, VP of Technology: "We are now at ppm levels for residual acetic acid, as well as greater uniformity of particle size. This will have a significantly favorable impact on our customers’ handling experience." Borys Schafran, Director, Marketing & Business Development, says, "These improvements demonstrate Evonik’s ongoing commitment to providing our customers with a premium product that exceeds expectations."

As MRC informed previously, Evonik Industries, a leading specialty chemicals manufacturer, has recently invested in Nanocomp Oy Ltd. (Lehmo, Finland) and now holds a minority share in the company. It was made as part of an investment syndicate with Finnvera Venture Capital. The investment sum was not disclosed. Nanocomp is a leading developer and producer of micro- and nano-optical structures that are imprinted on polymer films. Their functionalities enable optical systems to achieve higher performance - and to become smaller at the same time.

Evonik, the creative industrial group from Germany, is one of the world leaders in specialty chemicals. Its activities focus on the key megatrends health, nutrition, resource efficiency and globalization. Evonik benefits specifically from its innovative prowess and integrated technology platforms. Evonik is active in over 100 countries around the world. In fiscal 2013 more than 33,500 employees generated sales of around EUR12.9 billion and an operating profit (adjusted EBITDA) of about EUR2.0 billion.
MRC