Cognis Announces Third-Quarter Results
December 1, 2008
MONHEIM, Germany - In the first nine months of 2008, global specialty chemicals supplier Cognis increased the net sales of its core businesses by 7.3 percent to EUR 2.304 billion, compared with the same period in 2007. On an organic basis, sales grew by 12.0 percent. All three strategic business units that focus on the wellness and sustainability markets contributed to the sales growth.
The operating result of the core businesses (Adjusted EBITDA) was at EUR 264 million (down 2.7 percent) due to higher raw material, transportation and energy costs as well as unfavorable exchange rates. On an organic basis (excluding foreign currency effects and acquisitions and divestments), the operating result was almost on the same level as last year. Cognis was able to partly compensate increased raw material costs by raising selling prices and continued to optimize cost structures and improve efficiency in all areas.
Return on sales (Adjusted EBITDA as a percentage of sales) stood at 11.5 percent. Earnings before interest and taxes (EBIT) increased by EUR 4 million to EUR 156 million.
In the first nine months ending Sept. 30, 2008, net profit before exceptional items was at EUR 4 million, compared to a net profit of EUR 21 million in the same period of 2007. Continuing operations reported a loss of EUR 19 million (2007: +EUR 17 million). Discontinued operations showed a net profit of EUR 23 million (2007: +EUR 4 million). Continuing operations were EUR 36 million below 2007 mainly influenced by higher tax expenses and by the effects of revaluation of U.S. dollar debts on the basis of present currency development. The higher net profit of discontinued operations benefited from the favorable development of Oleochemicals.
Cognis CEO Antonio Trius commented, “Within the first nine months of this year we managed to face the challenges by increasing selling prices, further optimizing our costs and focusing ourselves on our growth strategy with profitable specialties. By doing so, we were able to partially counteract the effects of exceptionally high raw material and energy prices. As a result, our Adjusted EBITDA is almost on the same level as last year on an organic basis. All three of our core business areas, which focus on the global wellness and sustainability trends, were able to increase their sales.”
“The benefits of our wellness and sustainability-driven growth strategy, the cost optimization programs and the refinancing we carried out in 2007 are clearly visible,” said Trius. “The fourth quarter started off well with acceptable results in October, and no negative sales development could be recorded in November so far. However, the current macroeconomic situation may consequently affect order patterns of our customers and therefore our results in December. Therefore, we expect the overall results of 2008 to be lower than in 2007. Due to our well-balanced product portfolio, combined with stringent cost management, we are confident that in 2009 our results will be at least on the same level as this year.”