Celanese Corporation, a leading global chemical company, recorded a 27% slide in Q4 2008 net sales posting US$1,286 mln, from the same period last year, due to significantly lower volumes on weak global demand and unexpected inventory destocking throughout its end-consumer supply chains. Net earnings witnessed a loss of US$159 mln against with a profit of US$214 mln in the same period last year. However, the company incurred fixed asset impairment charges of US$94 mln associated with the potential closure of the company's acetic acid and vinyl acetate monomer (VAM) production facility in Pardies, France, and its VAM production unit in Cangrejera, Mexico, as well as other actions that the company is taking. Adjusted earnings per share for the Q4 2008 were a loss of $0.38 compared with a profit of $0.93 in the same period last year. "During the fourth quarter, historically weak market conditions drove a dramatic decline in overall global demand for many industries that we supply. While our Consumer Specialties segment continued to deliver high earnings levels, recessionary trends, coupled with an unprecedented inventory destocking, resulted in sharp volume declines in our other businesses," said David Weidman, chairman and chief executive officer.
The company's Advanced Engineered Materials segment saw year-on-year decline of US$58 mln in Q4 net sales standing at US$195 mln. The segment witnessed significant volume pressure across many of its product lines although it maintained increased pricing for its high value-in-use product portfolio. The Industrial Specialties segment successful new market strategy in Asia and favorable pricing were offset by overall weaker demand in North America and Europe. Net sales in the Q4 2008 stood at US$277 mln, a US$54 mln decrease from the same period last year, driven by lower overall volumes and unfavorable currency effects. The Acetyl Intermediates segment's net sales in the quarter were US$656 mln, a 39% decrease from the same period last year, primarily due to the lower volumes. On the other hand, the Consumer Specialties segment was the only segment which posted increase in Q4 net sales. Net sales were US$286 mln, up US$7 mln from the prior year period, primarily driven by higher pricing on continued strong demand.
The company said that it projects the customer inventory destocking activity to lessen in 2009 and expects earnings to improve from Q4 levels throughout 2009. having experienced a low demand through an extended period, Celanese has announced 'aggressive' measures including an review of its current manufacturing footprint and reductions of its overall fixed cost structure. Initial reductions have already been initiated and total between US$100 mln and US$120 mln annually.