Nova Chemicals, Canada's leading petrochemical maker posted a Q4 net loss of $214 million ($2.56 loss per share) for 2008 compared to Q3 net income of $98 million ($1.18 per share) and net income of $126 million ($1.51 per share) for the same quarter last year. The company indicated that the loss can be attributed to heavy customer destocking activity led by decline in petrochem prices and low sales volume. The company recorded an adjusted net loss of $191 million ($2.30 loss per share) as against adjusted net income of $83 million ($1.00 per share) in Q3 - 2008, and adjusted net income of $128 million ($1.53 per share) for same period of 2007. Several exceptional factors reduced adjusted earnings in the fourth quarter by a total of $(242) million ($(2.91) per share). As a result, NOVA Chemicals are planning a number of actions aimed at cost reduction, cash generation and cash conservation to yield an additional $400 million in cash on an annualized basis compared to 2008.
Nova's Olefins/Polyolefins business unit reported an adjusted EBITDA loss of $210 million, down significantly from the adjusted EBITDA gain of $282 million in the third quarter of 2008 and $308 million reported in the fourth quarter last year. The quarter-over-quarter decline was due to the unprecedented decline in energy and petrochemical prices, the historical sharp selling price reductions that outpaced flow-through feedstock cost decreases, lower sales volumes and an inventory write-down. For fiscal 2008, Olefins/Polyolefins reported adjusted EBITDA of $576 million in 2008, lower than the $975 million in 2007.
NOVA Chemicals' 50% share of INEOS NOVA provided an adjusted EBITDA loss of $77 million in the fourth quarter of 2008, compared to an adjusted EBITDA loss of $13 million in the third quarter of 2008. Selling prices for both styrene monomer and polystyrene declined much faster than flow-through feedstock costs, and volumes fell significantly in the fourth quarter versus the third quarter of 2008. For full year 2008, NOVA Chemicals' 50% share of INEOS NOVA provided an adjusted EBITDA loss of $78 million for 2008, compared to an adjusted EBITDA gain of $17 million for 2007 due to significantly lower sales volumes and higher flow-through feedstock costs in 2008 versus 2007.
Performance Styrenics reported an adjusted EBITDA loss of $35 million in the fourth quarter of 2008 compared to a loss of $8 million in the third quarter of 2008 primarily on lower margins as flow-through feedstock costs declined less than selling prices, and sales volumes declined across all product lines. The company has emphasized completely restructuring this segment and reduces fixed cost by 40% plus a significant cut in working capital requirements.