Solutia, a US-headquartered performance materials and specialty chemicals company, posted a 13% decline in fourth quarter net sales to US$429 mln compared to US$492 mln in same quarter last year. However, the company recorded year-on-year increase of 4% in adjusted EBITDA to US$72 mln against US$69 mln in the fourth quarter of 2007. "The sharp downturn in the global markets in the fourth quarter led to a dramatic reduction in demand," said Jeffry N. Quinn, chairman, president and chief executive officer of Solutia Inc. "We believe this weaker demand environment will continue well into 2009 and we have implemented a comprehensive plan that will position us to generate positive cash flow in these challenging times while at the same time preserving our long-term strategy. We have taken immediate actions to aggressively reduce costs, working capital and capital expenditures in response to the sharp decline in our markets." For Full Year 2008, Solutia's net sales increased 14% to US$2,110 mln from US$1,857 mln in 2007, on a pro forma basis while posting an increase in adjusted EBITDA to US$392 mln from US$305 mln in 2007.
In spite of the lower expected volumes, the company expects to be able to experience modest margin expansion over 2008 actual results and is targeting Adjusted EBITDA for 2009 to be in the range of US$325 mln to US$350 mln. Further, the company expects to generate cash from operations less capital spending in 2009 in the range of US$25 mln to US$75 mln. However, Solutia is projecting 2009 to be a challenging year as demand continues to be pressured as a result of the global economic environment. The company has identified additional cost saving opportunities which will be implemented throughout 2009 to further mitigate the sales impact from the current economic environment.