Albemarle reports marginal YOY decline in Q3-08 net income; polymer additives segment income dips

03-Nov-08

Leading global developer, manufacturer and marketer of highly engineered specialty chemicals-reported Q3 2008 net income of US$56.2 mln compared to US$59.1 mln for Q3 2007. The Company reported Q3 2008 net sales totaling US$660.5 mln compared to Q3 2007 net sales of US$584.0 mln. Operating profit was US$76.9 mln as strong performance in the Company's Fine Chemicals business segment and reductions in corporate expenses were partially offset by declines in the Catalysts and Polymer Additives business segments. The Company estimates the impact of Hurricanes Gustav and Ike at approximately US$11 mln pretax, ($0.07 per share), principally in the Catalysts and Fine Chemicals segments due to incremental costs and margin on lost revenue. Polymer Additives delivered record net sales for the Q3 2008 of US$261.7 mln, a 12% increase year on year fuelled by increase in net sales in flame retardants primarily due to higher volumes and favorable foreign currency exchange rates. However, Q3 2008 net income for the segment declined 7% from the Q3 2007 to US$27.4 mln due primarily to higher raw material costs. Catalysts segment generated Q3 2008 net sales of US$231.6 mln, a 7% increase year on year due to improved pricing and favorable foreign currency exchange rates. Again, the Q3 2008 income for Catalysts segment declined 11% versus the Q3 2007 to US$36.5 mln due primarily to reduced sales and production volumes caused by the hurricanes and refineries postponing unit outages. Fine Chemicals delivered record net sales for Q3 2008 of US$167.2 mln, a 24% increase year on year due primarily to strength in fine chemistry services and higher volumes and improved pricing from our bromine portfolio. Segment income for Q3 2008 of 2008 increased 21% relative to the same quarter last year to US$24.7 mln due primarily to higher volumes and improved pricing partially offset by higher raw material and energy costs. The company expects weak consumer spending and continued softness in the automotive and construction sectors to impact demand for Polymer Additives as we end this year and begin 2009. Efforts in this segment to consolidate operations and introduce new products to the market should help moderate the ongoing impact of weak markets.