Arkema reports 3Q 2023 results

MRC -- Arkema achieved a solid EBITDA margin and high cash generation in an ongoing context of low volumes reflecting the current economic environment, said the company.

Sales of EUR 2.3 bn in 3Q 2023 were down by 17.2% at constant currency compared with 3Q 2022. Volumes were down by 6.6% year-on-year in an environment of generally slow demand comparable to that of previous quarters. 10.6% negative price effect reflected lower raw materials, as well as price normalization in PVDF and upstream acrylics following the exceptional market conditions in 2022.

EBITDA was at EUR 386 M, down compared with the prior year's high comparison base (EUR 495 M in 3Q 2022), and EBITDA margin holding up well at 16.6% (16.7% in 3Q 2022), reflecting the strength of the group's positioning and the initiatives taken to adapt to the economic climate. Adjusted net income was at EUR 177 M (compared to EUR 260 M in 3Q 2022), representing EUR 2.38/share. High cash generation with recurring cash flow reached EUR 312 M (compared to EUR 434 M in 3Q 2022) and net debt was at EUR 2419 M including hybrid bonds (compared to EUR 2645 M at end-Jun 2023), representing 1.7x last-twelve-months EBITDA.

As indicated last Sep 2023 at the Capital Markets Day, Arkema confirms its EBITDA forecast of around EUR 1.5 bn in 2023, supported in particular by the resilience of several product lines and ongoing cost-saving actions.

We remind, Arkema has begun production of Sartomer® specialty UV/LED curing resins at its expanded facility in Nansha, China, where the Group invested to double the capacity, as announced end-2021, said the company.
This will support the development of more sustainable solutions for fast-growing applications in Asian markets, such as cutting-edge solutions in electronics, driven by 5G technology, and in renewable energies.

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MRC -- Huhtamaki's subsidiary in India has recently consolidated five manufacturing sites into larger local units, said the company.

Following the reorganization, the company has sold its real estate in Thane, India, from where a manufacturing facility and offices have been transferred.

The real estate was sold to Phoenix Group, a large real estate developer, for EUR 47 million. Huhtamaki will book a gain of approximately EUR 44 million in the fourth quarter of 2023 and it will be treated as an item affecting comparability.

We remind, Huhtamaki, the maker of Chinet® tableware, is launching fiber-based egg cartons, made from 100% recycled material, for US egg producers. Huhtamaki is bringing its fiber expertise to the US as an alternative to foam egg packaging.

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MRC -- Brenntag, the global market leader in chemicals and ingredients distribution, announced the opening of its new facility in Maurice, Louisiana, USA, said the company.

Strategically positioned along the U.S. Gulf Coast, the Maurice site is located south of Lafayette, Louisiana and will be the primary operations hub for Coastal Chemical, a Brenntag Group company, in addition to serving other areas in the region.

Equipped with expanded warehousing, storage and automated product production, the showpiece of the 63-acre complex will be a 5,000 square foot Innovation & Application Center designed to meet the demand and challenges of the dynamic deepwater production for Brenntag customers in the energy industry.

Scott Leibowitz, President of Brenntag Essentials North America, commented: “It is important for Brenntag to provide our customers with local services and last mile distribution excellence. Investing in this new facility enables us to foster Brenntag’s resilience in this market against the background of shifts on the global energy sector and supports the Brenntag energy service platform in North America.”

“This investment represents Brenntag’s commitment to providing technology-based solutions to the energy industry along the Gulf Coast and beyond,” added Blake Willis, President of Coastal Chemical. “It strengthens Coastal Chemical and Brenntag’s presence in the attractive South Louisiana area and allows for continued operational excellence and industry leading services, while helping our customers produce energy in an efficient and safe manner.”

We remind, Brenntag, a chemical and ingredient distributor, announces a new supplier agreement with Elementis to distribute a variety of applications in Mexico and Ecuador for the coatings and construction markets, effective immediately. Brenntag Specialties has expanded the distribution relationship with Elementis as a distributor for coatings and construction products in Ecuador and Mexico. The product lines are used in applications for industrial and architectural coatings, sealants, adhesives, inks and construction products.

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MRC -- On 7 Nov 2023, over 8000 employees at BASF's chemical production hub in Ludwigshafen, Germany, held a demonstration calling for a subsidized power price for Germany's chemical producers, said CNB.

High energy prices are putting energy-intensive industrial manufacturing at risk.

We remind, BASF SE plans to cut 2,600 jobs and reduce production in Germany as Europe’s biggest chemical producer braces itself for a future without cheap Russian gas. The company is closing a number of energy-intensive factories, including two ammonia plants and related fertilizer facilities, resulting in 700 job cuts at its main Ludwigshafen site in Germany.

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MRC -- Kuwait Integrated Petroleum Industries Company has sufficient stocks of diesel, naphtha, kerosene and fuel oil to meet obligations to local and foreign customers despite an almost complete shutdown of the al-Zour refinery last week, CEO Walid al-Badr told Reuters .

Gas supplies to the refinery were halted in a "force majeure situation" owing to a malfunctioning gas valve and the operations team was working to resume operations gradually, Badr said, adding that "these issues happen in this industry".

The company is working to restore operations within 10 days, he said. KIPIC had announced earlier on Thursday that a "limited fire" in a sulfur unit at the refinery had been brought under control without affecting operations.

Investigations into the cause of the fire are ongoing, a source close to the matter told Reuters, adding that initial indications are that the refinery shutdown and fire are unrelated.

We remind, Kuwait Integrated Petroleum Industries Company is in early talks with companies to partner on an integrated petrochemicals complex worth up to $9.70 B, its CEO said. The company also aims to raise capacity at its Al-Zour refinery by 20-30% above the maximum 615,000 barrels per day it expects to reach this month, Walid Al-Badr told Reuters. Initial discussions have begun with three potential partners, two from Asia and one from Europe, to build an integrated petrochemical complex alongside the Al-Zour plant.

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