Songwon doubles EBITDA and operating profit in Q2

Songwon doubles EBITDA and operating profit in Q2

MOSCOW (MRC) -- Songwon more than doubled its operating profit for the second quarter, benefiting from high demand, said the company.

The company’s earnings before interest, taxation, depreciation and amortisation (EBITDA) more than doubled to hit South Korean won (W) 62.9bn (USD48.2m), echoing the strength of the first quarter results. Songwon’s Industrial Chemicals segment increased revenue by almost 50%, as buyers benefited from favourable exchange rates in the region, and aimed to offset potential logistics issues from alternative suppliers.

Its key Polymer Stabilizers business recorded higher sales despite the negative impact from lockdowns in Asia and the war in Ukraine. Fuel and Lubricant Additives within this segment marked particular strength, as consumers bought ahead of typical patterns to ensure prompt deliveries of material.

Coatings also performed well due to high demand in the US, Europe and domestically due to ongoing industry recovery and the firm was able to pass down price increases to customers. The Performance Chemicals division also behaved similarly, with tin intermediate sales in line with maximum plant output and raw material prices for tin easing later in the quarter.

Polyvinyl chloride (PVC) sales suffered from logistics constraints outside of Asia but remained profitable as increased pricing was accepted downstream. Songwon’s polyurethane (PU) businesses also reported an increase in revenue, despite lower sales volumes, as thermoplastic PU demand was strong in the wire and cable market across global markets. The South Korean firm is cautious on predicting how the company will perform in the second half of the year against inflationary pressure, macroeconomic volatility, and supply chain constraints.

As per MRC, in October 2021, Gazprom Neftekhim Salavat LLC (GNS) signed an agreement for the development of a basic design and a license agreement for the use of Songwon Industrial technology. The contract makes it possible to organize the production of superabsorbent polymers (SAP) based on acrylic acid at the enterprise. The new production will be a continuation of the chain of processing of acrylates into superabsorbent polymers. In the manufacture of products will be used its own raw materials - butanol and propylene.

Songwon Industrial Co., Ltd. - the second in the world in terms of production of polymer stabilizers. The company's product range includes polymer stabilizers, alkylphenols and alkylcresols, PVC stabilizers, plasticizers, organotin, polyurethanes, flocculants. The company's headquarters is located in Ulsan, Korea.
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HIP Petrohemija declares FM on PE supplies from Pancevo

HIP Petrohemija declares FM on PE supplies from Pancevo

MOSCOW (MRC) -- HIP Petrohemija declares FM on PE supplies from Pancevo, said Nctww.

According to a letter sent to its customers, Serbia’s HIP Petrohemija declared a force majeure on all of its products from Pancevo, Serbia. The company had to declare the force majeure on July 28 due to unexpected issues at the company’s ethylene plant.

In its integrated petrochemical complex, HIP PetroHemija produces more than 600,000 tons/year of petrochemical products, while the company’s Pancevo complex houses a 200,000 tons/year steam cracker, a 90,000 tons/year HDPE plant and a 60,000 tons/year LDPE plant.

As per MRC, at the HIP Petrohemija oil complex, on September 3, a fire broke out in process equipment at the ethylene plant at the petrochemical site in Pancevo (Pancevo, Serbia). The fire was brought under control. During the evacuation from the plant, one employee received minor injuries. In a letter to customers, the company informed that production at this enterprise with a capacity of 200,000 tons of ethylene and 85,000 tons of propylene per year was stopped. The company in a letter announced force majeure for the supply of its products from this site.
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Indonesian government warns of fuel price hike

Indonesian government warns of fuel price hike

MOSCOW (MRC) -- Indonesians must prepare for a potential hike in fuel prices as the government looks to control its ballooning energy subsidies amid high global oil prices, said Hydrocarbonprocessing.

Southeast Asia's largest economy has tripled this year's energy subsidy budget to 502 trillion rupiah (USD34.22 billion) in order to keep some fuel prices and power tariffs unchanged and manage inflation. However, this may not be enough, as nearly all of the subsidized fuel quota has already been used, according to the finance ministry.

Indonesia's Investment Minister Bahlil Lahadalia said if the government has to increase the quota for subsidized gasoline to 29 million kiloliters from 23 million kiloliters, and assuming oil prices stay elevated and the rupiah weak, the subsidy bill could rise to up to 600 trillion rupiah.

"Please convey to the people that my feeling is we have to get ready in case a fuel price hike happens," Bahlil told a news conference, noting that it was fiscally unwise to spend 25% of government revenues on subsidies. "The burden on the state is high. Maybe this is momentum for us to work together to keep our fiscal (position) healthy," he added.

Indonesia's Finance Minister Sri Mulyani Indrawati on Thursday said she has asked state energy firm Pertamina to limit sales of subsidized fuels. Economists have criticized the government's decision to increase subsidies this year, saying this would take money away from projects with bigger economic impacts.

Critics have also said a widening price disparity between subsidized and unsubsidized fuels has incentivized a shift in domestic consumption patterns and smuggling to neighboring countries, leading to increased sales of subsidized fuels. A fuel price hike is sensitive in the world's fourth-most populous country and such a decision is usually taken by a head of government. Previous government moves to raise fuel prices have sparked street protests.

As per MRC, Linde plc (Woking, U.K.) announced it has signed a long-term agreement to supply high-purity industrial gases to PT Freeport Indonesia, a leading mining company in Indonesia. Linde will build, own and operate an air separation unit (ASU) to supply oxygen and nitrogen to PT Freeport Indonesia’s new copper smelter and refinery in Manyar, Indonesia. The new copper smelter, the largest copper processing site in the world, will process concentrates from PT Freeport Indonesia’s Grasberg mine. The new on-site facility is expected to start up in mid-2024 and will be one of the largest ASUs in Indonesia.
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Sabic posts near 4% rise in Q2 net profit

Sabic posts near 4% rise in Q2 net profit

MOSCOW (MRC) -- Saudi Basic Industries Corp (Sabic) said that it expects margins to be under pressure in the second half of 2022, due to a slowdown in global growth, lockdowns in China, conflict in Europe and continued supply chain challenges, said Hydrocarbonprocessing.

The guidance from the world's fourth-biggest petrochemicals firm by sales and asset value came as it reported an almost 4% rise in second-quarter net profit. SABIC achieved a net profit of 7.93 billion riyals (USD2.11 billion) for the three months to June 30, up from 7.64 billion a year earlier, the company said in a bourse statement.

That beat the 6.16 billion riyals mean forecast of seven analysts, Refinitv data showed. It attributed the increase in profit to higher average selling prices despite an increase in feedstock costs and higher selling and distribution expenses. Sales rose 32% to 55.98 billion riyals, exceeding an analysts' forecast of 53.78 billion.

Average selling prices rose 22% and were up 3% from the first quarter, Sabic said in its earnings presentation. Sales volumes increased 10% year on year and 3% quarter on quarter. The company said profits were also buoyed by an increase in its share of results of associates and joint ventures.

Sabic said it expects earnings before interest, tax, depreciation and amortization (EBITDA) to be flat this year with higher sales volumes offsetting high feedstock prices. Oil giant Saudi Aramco owns 70% of Sabic.

As per MRC, Sabic is looking at building a plant in Port Arthur, Texas, with process units for polypropylene (PP), high density polyethylene (HDPE) and polyethylene (PE) using SK Global Chemical’s Nexlene technology. Sabic filed a Chapter 313 application with the state of Texas Comptroller of Public Accounts for tax breaks from the local school district. According to the application, Sabic will build a 400,000 tonne/year PP unit, a 400,000 tonne/year HDPE C4/C6 bimodal unit and a 400,000 tonne/year PE unit using the Nexlene technology.
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Brenntag beats estimates on strong earnings

Brenntag beats estimates on strong earnings

MOSCOW (MRC) -- Brenntag, the global market leader in chemicals and ingredients distribution, continues its growth path and reports very strong results in the second quarter of 2022 in a macro-economic market environment that has been and remains highly challenging, said the company.

The severe geopolitical uncertainties add to the continued pressure on global supply chains. Brenntag’s two global divisions, Brenntag Specialties and Brenntag Essentials, continued their strong growth seen at the beginning of the year, resulting in a very positive first half of 2022.

Christian Kohlpaintner, Chief Executive Officer of Brenntag SE, said “Brenntag continues on its growth path, achieving very strong results in the second quarter of 2022 with excellent organic growth in both divisions. We are particularly pleased by the progress of our ambitious transformation program Project Brenntag, which will achieve our targets already by the end of 2022, one year ahead of plan. We expect from the remaining transformation initiatives an additional positive operating EBITDA impact for 2023, which will be quantified later this year. Our full year results are now expected at the upper range of our upgraded guidance provided in June."

In the second quarter 2022, Brenntag generated sales of 5,061.2 million EUR. Operating gross profit rose by 28.0% to 1,144.8 million EUR compared to 838.7 million EUR in previous year’s quarter. Operating EBITDA reached 533.8 million EUR, a strong year-on-year increase of 41.0%. Earnings per share totaled 1.86 EUR which represents more than a doubling of last year’s EPS.

“In the highly challenging environment of the first half of 2022, product availability as well as prompt and reliable delivery were once again key for Brenntag’s success. We were able to translate the positive gross profit growth into an over-proportional operating EBITDA growth, which is reflected in a very strong conversion ratio for the group of 46.6%”, comments Kristin Neumann, Chief Financial Officer of Brenntag SE.

As MRC reported earlier, last summer, Brenntag acquired all operating assets and business of Matrix Chemical, LLC. The company is a solvents distributor and the largest distributor of acetone in North America with sales of around USD 200 million year to date in 2021. Along with phenol, acetone is largely used to produce bisphenol A (BPA), which, in its turn, is used in the production of plastics such as polycarbonate (PC) and epoxy resins.

BCD Chemie, a Brenntag Group company, is headquartered in Hamburg, Germany. It focuses on the pan-European marketing of industrial and performance chemicals. As a link between manufacturers of high-quality chemical raw materials and users from many industries, BCD Chemie provides B2B sales solutions for a wide range of industries and applications. Profound market knowledge, competent product and application consulting as well as comprehensive expertise in chemical-technical and market-analytical contexts form the basis of its philosophy of modern chemical distribution.
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