Polymer producers post disappointing financial results for Q2-2012

Several major global polymer producers have reported reduced profits or even losses on their second quarter results, as per ChemOrbis. Producers cited disappointing global demand, higher raw material costs and reduced production as some of the main reasons for their weaker results. Saudi Arabia’s Rabigh Refining and Petrochemical Company (PetroRabigh) posted a net loss of SAR104.4 mln (US$27.8 mln) in the second quarter, down sharply from the SAR115.8 mln (US$30.9 mln) profit the company reported in the first quarter. The company attributed its quarterly loss to a production shutdown at its facility in Rabigh. Saudi International Petrochemical Company (Sipchem) stated that its net income for the second quarter dropped 17.7% year over year to SAR136.1 mln (US$36.3 mln). The producer pointed to reduced production and sales volumes as the main reason for the reduction in their second quarter income figures. Major Saudi Arabian producer SABIC reported a 35% year over year reduction in its second quarter profit, with its net profit for Q2 coming to SAR5.3 bln (US$1.4 bln). The company cited reduced production rates, and lower prices for its end products as the main reasons for the decline in its second quarter profits. India’s Reliance reported that its net profit dropped 21% year on year to reach INR44.73 bln (US$809 mln) in the April-June quarter, which is the first quarter in Reliance’s fiscal year. The April-June quarter was the third consecutive quarter in which Reliance posted a decline in its net profit. Dow Chemical, the largest US-based chemical company, reported weaker than expected earnings in the second quarter, with the company pointing to globally disappointing demand, which Dow believes could remain in place for the rest of the year, as the main factor behind its weaker results. Dow’s net income fell from US$1.07 bln in the second quarter of 2011 to US$734 mln over the same period of 2012. Dow’s second quarter earnings, which came to around 55 cents per share were below analysts’ estimates, which called for the company’s earnings to come in at around 64 cents per share, according to a survey by Bloomberg. Dow reported that it operated its factories at an average of 78% in the second quarter and added that its end product prices were down by an average of around 5%. German chemical company BASF also posted disappointing results for the second quarter, with the company’s net profits sliding 15.5% from the second quarter of 2011 to reach €1.229 bln (US$1.49 bln) in the second quarter of 2012. BASF stated that its customers were hesitant in their purchases over the past quarter owing to their desire to keep limited inventories, adding that their sales in Asia were constrained by slower economic growth in China. Ineos reported a 46% year over year drop in its earnings before interest, taxes, depreciation and amortization (EBITDA) to €308 million (US$371 mln) in the second quarter. Ineos’ olefins and polymers section for Europe saw its EBITDA fall from €146 mln in the second quarter of 2011 to €57 mln in 2012. The company’s olefins and polymers business in North America reported a relatively smaller decline, falling from €163 mln in Q2 2011 to €132 mln in 2012.