European petchem companies post lower financial results in 2018

Petrotahlil-Major petrochemical companies revealed their financial results for the full year of 2018. They mostly faced weaker revenues throughout last year due to a series of factors.

These factors included the unusually long period of low water levels on the Rhine River and outages that negatively affected production volumes as well as lower integrated polyolefin margins. Brexit driven uncertainties also hindered activities in the region’s chemical and petrochemical markets.

Higher sales fail to lead to higher incomes 

BASF 

The company’s income from operations (EBIT) before special items declined by more than 15% to €6.4 billion ($7.2 billion), compared with the previous year despite a 2% gain in its sales compared with the previous year.

According to BASF, an economic slowdown in the automotive industry, its largest customer sector, adversely impacted its results and added that lower demand from China amid the trade conflict with the US also had a negative effect on its yearly financial results.

SOLVAY 

For the full-year, Belgian Solvay’s net income was down by 19% at €858 million ($975 million), primarily due to amortization and restructuring costs, although sales were up. . 

The company said its specialty polymers business delivered solid volume growth in the first half of the year. Demand from healthcare and automotive markets gave signs of a weakening at the end of the year.

BOREALIS 

For the full year 2018, Borealis announced a net profit of €906 million ($1.02 billion) when compared to €1.09 billion ($1.23 billion) in 2017. Lower results were driven by weaker integrated polyolefins margins despite higher sales. 

INEOS 

INEOS announced that the company’s EBITDA slipped by 11% to €2.28 billion ($2.58 billion) when compared to €2.52 billion ($2.85 billion) in 2017.

The company attributed lower results to non-cash inventory holding losses experienced in its Olefins and Polymers (O&P) segments as crude oil and product prices fell significantly during the fourth quarter.

O&P Europe’s EBITDA declined by 18% in the full year of 2018 from 2017. Strong olefins demand was partially offset by comparatively weak aromatics demand while olefin volumes were adversely impacted by the low water levels on the River Rhine. The increased competition from import products reduced polymer margins despite good demand.

Weaker local currencies also weighed on results 

SIBUR 

Russian SIBUR’s total revenue for 2018 increased by around 25% to RUB568.6 billion ($8.6 billion) due to positive dynamics in petrochemical products pricing. Revenue from Olefins and Polyolefins increased by 14.4% year-on-year. This was mainly due to favorable pricing in PP and BOPP-films, while it was partly offset by a decline in revenue from LDPE sales.

Yet, net profit decreased by 7.9% year-on-year to RUB 110.8 billion ($1.7 billion) in 2018 year-on-year due to the depreciation of the Russian ruble against the euro and US dollar.

SIBUR’s PP sales volumes decreased by 2.5% year-on-year due to a maintenance shutdown in Tobolsk. The company’s PE sales also declined by 2.2% last year amid a planned maintenance shutdown in Tomsk.