Arkema reported Q4 loss and decline in sales

Arkema, a manufacturer of chemical products, reported for the fourth quarter of 2008 a net loss of €72m, in comparison with a net profit of €18m for the same quarter of 2007. Moreover, sales dipped by approximately 10%, to €1.2 billion. Arkema stated that the fourth quarter results were negatively affected by an unforeseen drop in demand in various sectors and inventory de-stocking spread across the entire supply chain.

Fourth quarter sales of vinyl products segment reduced by about 16%, to €281m compared with the year ago period. In addition to that, sales in the performance products segment fell by 8.5%, to €335m whereas in the industry chemical segment it decreased by 9%, to €564m. Net profits declined by 18%, to €100m and sales reduced by 0.7%, to €5.6 billion for the entire year of 2008. EBITDA fell by 56%, to €47m for the fourth quarter, compared with 2007.

Thierry Le Hénaff, chairman and CEO of Arkema, said: “In this tough environment marked by the collapse in demand on many markets in the fourth quarter 2008, Arkema resisted well, achieving an EBITDA margin close to that in 2007 at 9% and generating a positive net profit of €100m. Our financial structure remains very healthy with a net debt representing one times the annual EBITDA.

“Market conditions have not showed any signs of improvement since the beginning of this year and visibility remains low for the rest of 2009. In this context, Arkema’s first priority is to focus on cash generation and preservation of its balance sheet by a very strict management of its working capital and capital expenditures.

The company reiterated that immediate measures were taken to streamline production to meet decreased demand and strict cash management was prioritised.