Nova records loss of US$68 mln in Q4

27-Jan-06

Nova Chemicals Corp. has reported a loss of US$68 million for the three months ended Dec. 31, as against year-ago profit of US$162 million. However, low stockpiles with processors coupled with a market gaining strength and the sorting out of problems at the Ontario plant augurs well for Nova's outlook, with an optimistic picture in store despite a big fourth-quarter loss. Profits were hit due to an expenditure of US$116-million on equipment problems. Closure of the Corunna ethylene cracker plant in the fourth quarter is estimated to have an after-tax impact of US$70 million. The plant is operating at 75% of its capacity and Nova expects to deliver a full range of products from that operation within days. Nova's styrenics division posted a loss of US$65 million in Q4 due to soaring feedstock prices in the wake of U.S. Gulf coast hurricanes. Concurrently, sales volumes fell 14% from the previous quarter due to normal seasonal trends. The olefins/polyolefins business alone reported net income of US$45 million in Q4. Hence, net loss from the styrenics business and profitable olefins/polyolefins business was $20 million.