Chemical industry weekly news roundup, 1 August
9:44 AM MDT | August 1, 2014 | By LINDSAY FROST
This Week in CW:
Several more companies reported earnings this week. In Asia, Mitsubishi Chemical Holdings, the parent of Mitsubishi Chemical, says its net profits decreased by 46.8% in its fiscal first quarter, ended 30 June 2014, compared with the year-ago quarter, to ¥5.85 billion ($57 million). Net profits decreased due to extraordinary losses associated with the previously announced shutdown of the company’s No. 1 naphtha cracker at Kashima, Japan, and the site’s No. 1 benzene unit, in May 2014, Mitsubishi says. Mitsui Chemicals reports a 27.6% fall in net profits for the fiscal first quarter ended 30 June, compared with the year-ago quarter, to ¥3.4 billion ($33 million). Sales in the first quarter increased 7.2%, to ¥389.2 billion due to an increase in sales volume with the improved production in the petrochemicals segment. In Europe, Air Liquide reported €3.77 billion in revenues during the second quarter, down 2.4% year-on-year (YOY). The figures exclude foreign exchange, cost of natural gas, and significant M&A impacts. Arkema's quarter-two net income fell by 58%, to €47 million ($63 million) from €112 million one year earlier. Ebitda amounted to €206 million, down from €273 million in the second quarter of 2013. Evonik Industries reported second-quarter net income of €139 million ($186.2 million), down 28% on the year-earlier period. Sales were 1% higher at €3.25 billion. In North America, Mosaic reported its results for the second quarter, with net income of $248 million down 73% YOY with earnings per share of 64 cts/share below analyst estimates of 74 cts/share, according to Thomson Reuters (New York). FMC reported net income of $109.1 million, or 81 cts/share, down 8% YOY, on revenues up 13%, to $987.8 million. Eastman Chemical reports net earnings of $292 million, 9.8% higher year-on-year YOY. Adjusted earnings of $1.92/share were 14.2% higher YOY and beat a $1.84/share consensus of analysts’ estimates compiled by Thomson Reuters (New York).
Westlake Chemical has closed the previously announced €490-million ($656.5 million) acquisition of polyvinyl chloride (PVC) manufacturer Vinnolit Holdings (Ismaning, Germany) and its subsidiary companies, from private equity firm Advent International, Westlake says. The acquisition includes Vinnolit's six production sites. These operations have a combined annual capacity for 780,000 m.t./year of PVC, including specialty paste, thermoplastic specialties, and suspension grades; 665,000 m.t./year of vinyl chloride monomer capacity; and 475,000 m.t./year of membrane-cell caustic soda capacity.
The US Senate Committee on Homeland Security and Governmental affairs, with a bipartisan vote, passed an amended version of the Chemical Facility Anti-Terrorism Standards Program (CFATS) Authorization and Accountability Act of 2014, or H.R. 4007—extending the program for four years. Earlier this month, the House of Representatives passed H.R. 4007, also with a bipartisan vote. The bill reestablishes CFATS, under which the secretary of the Department of Homeland Security (DHS) is required to establish risk-based performance standards designed to protect covered chemical facilities from acts of terrorism.
Around the Web:
The World Trade Organization (WTO) failed on Thursday to reach a deal to standardize customs rules, which would have been the first global trade reform in two decades but was blocked by India's demands for concessions on agricultural stockpiling, according to Reuters. The deadline passed without a breakthrough. WTO ministers had already agreed the global reform of customs procedures known as "trade facilitation" last December, but it needed to be put into the WTO rule book by 31 July. Most diplomats saw that as rubber-stamping a unique success in the WTO's 19 year history, which according to some estimates would add $1 trillion and 21 million jobs to the world economy, so they were shocked when India unveiled its veto.
US stocks ended July with a more than 300-point selloff for the Dow Jones Industrial Average, a swoon that snapped a five-month winning streak for the broader market, according to the Wall Street Journal. Traders said there was no single catalyst for the stumble, though selling started early and accelerated into Thursday's closing bell, dragging the Dow into negative territory, down 0.1%, for 2014. Investors said an upbeat reading from the labor market sowed concerns about the Federal Reserve possibly raising rates quicker than many investors anticipate. Some pointed to disappointing earnings reports from US companies Thursday, which disrupted what has been a strong season for corporate profits.
The hedge fund firm of billionaire Paul Singer has about 300 employees, yet it has managed to force Argentina, a nation of 41 million people, into a position where it now has to contemplate a humbling surrender, writes the New York Times. Argentina on Wednesday failed to make scheduled payments on its government bonds. The country has the money to pay the bonds, but a federal court in Manhattan has ruled that unless Argentina settles its debt dispute with Singer’s firm, Elliott Management, it is barred from paying its main bondholders.