- EBITDA +12.1% to Ã¢â??Â¬51.0 million
- EBITDA margin before special effects increases to 9.4% (Q1-Q3 2008: 8.3%)
- All segments make positive contribution to operating earnings in 3rd quarter
- Sales fall to Ã¢â??Â¬544.9 million due to the price of crude oil (Q1-Q3 2008: Ã¢â??Â¬809.9 million)
- Refinery shut-downs prevent even better earnings
Salzbergen, 11 November 2009. H&R WASAG AG has succeeded in increasing its EBITDA margin to 9.4% (Q1-Q3 2008 before special effects: 8.3%) despite the difficult operating environment resulting from the worldwide financial crisis. The Chemical-Pharmaceutical Raw Materials Division in particular, which generates around 95% of consolidated sales, was able to once again underline its earnings capacity. In the first nine months, consolidated sales were down 32.7%, largely a result of falling raw material prices which were passed on to customers in the form of lower sales prices. Sales volumes for our main products in contrast were down only 3.5% on the same period in the previous year. EBITDA increased by 12.1% to Ã¢â??Â¬51.0 million (Q1-Q3 2008: Ã¢â??Â¬45.5 million) and EBIT was up 9.7% to Ã¢â??Â¬35.2 million (Q1-Q3 2008: Ã¢â??Â¬32.1 million). Net income came in at Ã¢â??Â¬20.5 million (Q1-Q3 2008: Ã¢â??Â¬12.5 million) and earnings per share increased 64.3% year-on-year to Ã¢â??Â¬0.69 (Q1-Q3 2008: Ã¢â??Â¬0.42).
Ã¢â?¬Å?Even though the previous yearÃ¢â?¬â?¢s earnings were impacted by provisions for the cartel fine of Ã¢â??Â¬ 22.0 million, we are very satisfied with earnings development in the context of the current economic environment,Ã¢â?¬Â says Gert Wendroth, CEO of H&R WASAG AG.
All segments make positive contribution to operating earnings
The Chemical-Pharmaceutical Division was able to increase its EBITDA contribution compared to the previous quarter by 13.6% to Ã¢â??Â¬17.5 million (Q2 2009: Ã¢â??Â¬15.4 million). However it fell short of the record quarter in the previous year adjusted for the cartel fine provision (Q3 2008: Ã¢â??Â¬28.2 million).
Initially raw material price hikes impacted margins in the 2nd quarter: Higher raw materials costs can usually only be passed on to customers with a time lag and therefore negatively impact earnings. However, as there were no further significant increases in raw material prices due to the weak dollar, the margin situation improved again from mid August. Sales volumes for our main products developed positively both compared to the previous quarter and the same quarter in the previous year. Ã¢â?¬Å?Despite the unscheduled refinery shut-downs, we have almost offset the losses from the start of the year and, as a result, we anticipate increased sales volumes from our main products for the full year,Ã¢â?¬Â says COO Niels H. Hansen.
The substantially smaller Plastics Division was able to generate an EBITDA of Ã¢â??Â¬0.4 million after recording a negative figure of Ã¢â??Â¬-0.5 million in the previous quarter (Q3 2008: Ã¢â??Â¬0.4 million). This improved earnings figure is attributable to the wide-ranging restructuring of the division. On the demand side, the situation remains tense due to the weak development of the automotive industry. As a result, the management took the decision to reduce headcount by approximately 100 of 370 jobs at the Plastics DivisionÃ¢â?¬â?¢s largest site in Coburg. The divisionÃ¢â?¬â?¢s management is negotiating the details of these personnel adjustments with the Works Council. We aim to agree on a socially acceptable redundancy plan and hope to secure the remaining jobs on a permanent basis.
Low interest rate secured in the long term
H&R WASAG AG is also significantly improving its long-term financing structure. In July and October, we hedged interest rates for credit volumes of Ã¢â??Â¬40 million and Ã¢â??Â¬20 million for a period of five years. Ã¢â?¬Å?Together with the 10-year KfW loan of Ã¢â??Â¬20 million from the 2nd quarter, H&R WASAG AG has managed to secure attractive interest rates for a credit volume of Ã¢â??Â¬80 million in the long-term,Ã¢â?¬Â says CFO Andreas Keil.
Optimistic outlook for the full year
In the Chemical-Pharmaceutical Division, the positive development in sales volumes continued at the start of the 4th quarter. In addition, no further unscheduled plant shut-downs were recorded.
The renewed increase in the price of crude oil up to a preliminary annual high at USD 80.3 on 21 October however temporarily led to tighter margins.
In the significantly smaller Plastics Division, no improvement is expected in the order situation in the short term. Due to the measures already introduced for cutting costs and the corresponding provisions, the Executive Board anticipates restructuring expenses in the current quarter in the lower single-digit million range. These measures are aimed at making a sustained return to profitability in the coming year. Ã¢â?¬Å?For the 4th quarter as a whole, we are expecting positive earnings similar to the 3rd quarter, mainly driven by the Chemical-Pharmaceutical Division. In view of the economic crisis, earnings for the whole year will be very buoyant, if not quite up to the level of the very good 2008 financial year (adjusted for the cartel fine of Ã¢â??Â¬22 million).
If the current upturn in the global economy continues in the coming months and crude oil prices do not record extreme price developments, we are optimistic for the 2010 financial year,Ã¢â?¬Â says Wendroth.
H&R WASAG AG, Investor Relations / Communications, Christian Pokropp
Am Sandtorkai 64, 20457 Hamburg, Germany
Tel.: +49 - (0) 40-43218-321, Fax: +49 Ã¢â?¬â?? (0) 40-43218-390, Mail: Christian.Pokropp(at)hur-wasag.de
Additional information regarding H&R WASAG AG:
H&R WASAG AG is an SDAX-listed specialty chemicals company engaged in the development and manufacture of crude oil-based chemical-pharmaceutical specialty products, and in the production of precision plastic components. The Group companies comprising the individual divisions enjoy excellent positions as market and/or technology leaders.