Süd-Chemie reports a marked revival in business activity in 2010 after a slow start to the year
First half of 2010: revenue 6 percent, operating profit (EBIT) 4 percent up on the first half of 2009
Süd-Chemie AG, Munich reported a satisfactory performance for the first six months of 2010. After a weak start to the year, the specialty chemicals enterprise for catalysts and adsorbents recorded a marked revival in business activity from March 2010 onwards, notably in its more cyclically sensitive sectors. As a result, consolidated revenue improved by 5.7 percent during the first six months of 2010 compared with a relatively strong first half in 2009, climbing to EUR 576.3 million. In the first quarter of 2010, revenue rose by only 1.0 percent on year-on-year basis. Operating profit (EBIT) rose by 3.6 percent compared with the first half of 2009 to reach EUR 41.7 million. Earnings before interest, taxes and depreciation (EBITDA) rose by 4.2 percent to EUR 74.3 million.
During the first six months of 2010, earnings benefited mainly from higher, demand-driven plant utilisation in almost all areas of activity, a more profitable product mix and cost savings. The rise in earnings was however curbed by a lack of income from currency and commodity hedging transactions compared with the first half of 2009 and by increasing expenditure on Süd-Chemie´s two most research-intensive and investment-intensive start-up operations, namely battery materials (lithium iron phosphate for lithium-ion batteries used for instance in electric automobile drives) and bio-catalysis (processes used to manufacture cellulose-based, second-generation bio-ethanol from straw and other agricultural waste).
The recovery on the global chemical markets had a generally positive influence on Süd-Chemie´s performance in 2010, with half-year revenue and earnings (EBIT) figures rising, in some cases significantly, in five of its six business units. The Business Units for Adsorbents and Additives, Water Treatment and also Energy and Environment reported double-digit percentage revenue growth, while earnings rose at an even faster rate. Both the Foundry Products and Specialty Resins Business Unit and the Business Unit for Performance Packaging recorded single-digit percentage gains in revenue, but also achieved a double-digit percentage increase in earnings. Although performance in the Catalytic Technologies Business Unit has progressively improved since its weak start to the year, revenue and earnings still remained below last year´s relatively high level. Based on its significantly healthier revenue performance in the course of the year and the sharp rise in order intake, there is however every confidence that this largest and most profitable Business Unit will achieve its ambitious business targets for full 2010.
Since business developed as anticipated during the first half of 2010 and at the beginning of the second half, the company is adhering to its original forecast for 2010. Based on this, revenue is expected to rise by around 5 percent to reach EUR 1.125 billion and operating profit (EBIT) by 10 percent, following adjustment for non-recurring items.
Dr. Günter von Au, Managing Board Chairman of Süd-Chemie AG, said: "After a very strong final month in 2009 and a slow start to 2010, we subsequently swung back onto our sustainable growth path as the year progressed. Compared with the first half of 2009, both revenue and earnings have improved during the first six months of 2010, increasing our operating profitability. In view of the encouraging business and order performance over the past four months, we are confident of increasing our growth rate even further in the course of this year."
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