MOSCOW (MRC) -- Arkema’s third-quarter net profit fell year on year despite an increase in earnings amid an ongoing trend of customer destocking in a challenging demand environment, said the company.
Company earnings before interest, taxes, depreciation and amortisation (EBITDA) rose year on year as a stronger performance from its core adhesives and advanced materials division offset a weaker quarter for its industrial specialties operations.
Net profit fell over the same period as a result of start-up costs during the quarter, expenditure on the consolidation of specialty surfactants firm ArrMaz, which it acquired in July, and unfavourable currency effects.
The first half of the year was characterised by industry adjustments across many of the company’s end markets, and Arkema had expressed hopes in August that those headwinds would dissipate through the second half of the year, but this has yet to occur, according to CEO Thierry Le Henaff.
Despite weaker profitability for the quarter, group earnings remain resilient and are expected to match the €1.39bn earnings posted in 2018 this year.
Third-quarter high-performance materials division EBITDA rose over 12% year on year on the back of an improved product mix and more favourable raw materials pricing, while industrial specialties earnings fell 8%, with fluorogases volumes “strongly penalised” by illegal imports into Europe.
As it was infromed earlier, Arkema is to divest its Functional Polyolefins business to South Korea’s SK Global Chemical for EUR335m. Functional Polyolefins produces ethylene copolymers and terpolymers for the food packaging, cable, electronics and coatings markets.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,436,390 tonnes in the first eight months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the PP consumption in the Russian market was 909,260 tonnes in January-August 2019, up by 10% year on year. Shipments of PP block copolymer and homopolymer PP increased.
Arkema is a leading European supplier of chlorochemicals and PVC. Kynar and Kynar Flex are registered trademarks of Arkema Inc.