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Albemarle posts first quarter earnings of US$43.1 million

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Hydrocarbon Engineering,


Albemarle Corporation reported first quarter 2015 earnings of US$43.1 million, or US$0.40 per share, compared to first quarter 2014 earnings of US$56.6 million, or US$0.71 per share. First quarter 2015 adjusted earnings were US$127.2 million, or US$1.17 per share, compared to US$78.4 million, or US$0.98 per share, for the first quarter of 2014. The company reported net sales of US$884.4 million in the first quarter of 2015, up from net sales of US$599.8 million in the first quarter of 2014, driven primarily by the inclusion of the Rockwood acquisition, which closed 12 January 2015.

"We are pleased with our strong start to 2015, in which both Chemetall® Surface Treatment and Performance Chemicals, including Bromine, Lithium and PCS, met or exceeded our January expectations, despite increasing foreign exchange headwinds from the strengthening US dollar and continued low crude oil prices," said Albemarle President and CEO Luke Kissam. "We are moving quickly to meet our integration and synergy targets related to the Rockwood acquisition, and are very pleased with the progress so far as we are already operating our businesses in the new organisational structure announced in January. Given the strong operational start to the year, the one time foreign exchange gain related to cash on hand in quarter one and our confidence in continued good performance, we are both raising and narrowing our guidance for 2015 from adjusted EPS of US$3.15 - US$3.70 to US$3.65 - US$4.05."

Quarterly segment results

As previously announced on 20 January 2015, as a result of the completion of its acquisition of Rockwood Holdings, Inc., the company has realigned its global business units. The new structure aligns the company's strategic assets and businesses to be market focused and allows it to more effectively leverage its combined resources on innovation and growth. The new reporting structure consists of three reportable operating segments, or global business units (GBUs): Chemetall Surface Treatment, Refining Solutions and Performance Chemicals.Three businesses that the Company previously announced it intends to sell will be reported together in the ‘All Other’ category.

Performance Chemicals reported net sales of US$388.4 million in the first quarter of 2015, a decrease of 1% from pro forma net sales in the first quarter of 2014 of US$391.7 million. The decrease is primarily due to unfavourable impacts from currency exchange, the stub period, and unfavourable Bromine pricing, partially offset by favourable Lithium and PCS volumes and favourable Lithium pricing. Adjusted EBITDA for Performance Chemicals was US$130.5 million, an increase of 13% from first quarter 2014 pro forma results of US$115.2 million. The increase was primarily driven by higher overall sales volumes, favourable Lithium pricing and the addition of our Talison joint venture, partially offset by unfavourable Bromine pricing and unfavourable impacts from currency exchange.

Refining Solutions generated net sales of US$179.2 million in the first quarter of 2015, a decrease of 8% from net sales in the first quarter of 2014 of US$194.7 million, primarily driven by unfavourable Heavy Oil Upgrading volumes, unfavourable Clean Fuels Technology pricing and mix, and unfavourable impacts from currency exchange, partially offset by favourable Clean Fuel Technologies volumes. Adjusted EBITDA for Refining Solutions was US$42.2 million in the first quarter of 2015, down 31% from first quarter 2014 results of US$61.0 million, due primarily to lower overall net sales, unfavourable Clean Fuels Technology pricing and mix, unfavourable impacts from currency exchange and the west coast port strike, partially offset by favourable pricing on raw materials and natural gas.

Chemetall Surface Treatment reported net sales of US$192.1 million in the first quarter of 2015, a decrease of 6% from first quarter of 2014 pro forma net sales of US$203.7 million, primarily due to the stub period and unfavourable impacts from currency exchange, partially offset by favourable pricing and additional sales volumes related to the acquisition of the remaining shares of the Chemetall Shanghai joint venture in February. Adjusted EBITDA for Chemetall Surface Treatment was US$46.0 million in the first quarter of 2015, a decrease of 1% from first quarter 2014 pro forma results of US$46.4 million, primarily driven by the stub period and unfavourable impacts from currency exchange.

All other net sales were US$122.4 million in the first quarter of 2015, a decrease of 24% from pro forma net sales in the first quarter of 2014 of US$161.2 million primarily due to unfavourable Fine Chemistry Services volumes and unfavourable impacts from currency exchange. All Other adjusted EBITDA was US$13.6 million in the first quarter of 2015, down 51% from first quarter 2014 pro forma results of US$27.6 million, due primarily to lower overall sales volumes and unfavourable impacts from currency exchange.

Corporate results

Corporate adjusted EBITDA was US$33.3 million in the first quarter of 2015 which includes a US$52.4 million currency exchange gain related primarily to cash and excludes stub period expenses of US$2.0 million. Excluding the currency exchange gain on cash and including expenses from the stub period, adjusted EBITDA was (US$21.1) million compared to US$(33.9) million pro forma adjusted EBITDA in the first quarter of 2014. The US$12.8 million improvement is related to achieved synergies and lower spending.


Adapted from press release by Rosalie Starling

Read the article online at: https://www.hydrocarbonengineering.com/refining/07052015/albemarle-posts-first-quarter-earnings-of-us431-million-726/


 

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