Nova reports net loss of US$214 mln as resin sales sink to 8 year lows

30-Jan-09

Afflicted by pathetic resin sales that have sunk to 8 year lows, Canada's largest chemical maker, Nova Chemicals Corp. has reported a net loss of US$214 mln. Sales have collapsed by 36% to US$1.15 bln, largest dip recorded by the company since Q4-08. All three of Nova's units had losses, led by a US$210 mln loss in the olefins business. The Alberta advantage has massively shrunk which has negative implications for future profitability. Results also were hurt by higher inventory costs and writedowns, which reduced profit across all units by US$493 mln. Profit benefited from a US$111 mln gain on currency exchange, as Nova on Oct. 1 adopted the US dollar as the currency of its Canadian operations. The performance styrenics unit suffered a US$35 mln loss compared with break-even results a year earlier. The loss from the Ineos Nova joint venture, which makes polystyrene widened to US$77 mln from US$6 mln.