Arch Chemicals Q3 Profit Declines

Published: 04-Nov-2009

Higher pricing and the benefit from the Advantis acquisition were more than offset by lower volumes and unfavorable foreign exchange

Arch Chemicals has reported sales of $350.5m for the third quarter of 2009, compared to $367.9m for the same period of 2008. Higher pricing and the benefit from the Advantis acquisition were more than offset by lower volumes and unfavorable foreign exchange.

Third-quarter profit fell to $10.3m, or 39% on a prior-year trade-related gain while demand remained weak for its industrial biocides, though earnings beat expectations.

Treatment products reported sales of $309.7m and operating income of $25.2m in 2009 compared with sales of $310.9m and operating income of $31.2m in 2008.

Personal care and industrial biocides reported sales of $77.8m and operating income of $13.6m compared to sales and operating income of $78.8m and $12.3m, respectively, in 2008. Operating income increased $1.3m as higher pricing and favorable foreign exchange were partially offset by lower volumes and higher plant costs related to the new manufacturing facilities in China.

Michael Campbell, chairman, president and CEO of Arch Chemicals, said: “I am pleased by our strong third quarter results. We realised increased selling prices in several of our businesses and saw higher demand for our health and hygiene biocides. We also benefited from significant cost reduction efforts across all businesses, which mitigated continuing unfavorable sales comparisons across most of our businesses and the protracted impact of unfavorable weather patterns in our North American HTH water products business.

“We remain on target to achieve our earnings forecast. While end-use demand for our products appears to have stabilized, we are not yet experiencing a marked recovery in demand. Our results are benefiting from numerous supply chain, manufacturing and SG&A cost-reduction initiatives across all of our businesses.

“Our relentless commitment to improve operating margins by raising prices wherever possible, aggressively reducing costs, optimising our portfolio and maximising cash generation will sustain Arch through these challenging times, and is the driver of our long-term profitable growth.”

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