Chemical company Celanese Corporation (CE) declared that it will raise list and off-list selling prices for Vinyl Acetate Monomer in Europe by €20 ($26.4) per metric ton. The price hike is effective immediately or as per the contracts. This follows a hike of €50 ($66.1) per metric ton for the same product on Jul 1, 2013.
Earlier to this, Celanese increased list and off-list selling prices for the same product by €60 ($79.2) per metric ton in Europe on Jan 11, 2013, which was effective from Jan 15, 2013.
Celanese’s acetyl products, which include vinyl acetate monomer, acetic acid, acetic anhydride, and acetate esters, are used as starting materials for colorants, paints, adhesives, coatings and medicines. Acetyl products also provide organic solvents and intermediates for pharmaceutical, agricultural, and chemical products. These products fall under the company's Acetyl Intermediates segment.
Celanese posted its second-quarter 2013 results on Jul 18. The company’s adjusted earnings (excluding one-time items) of $1.12 per share missed the Zacks Consensus Estimate of $1.16. Earnings (as reported) from continuing operations were 83 cents a share in the quarter, down 40% from $1.38 recorded a year ago. Sales in the quarter were $1,653 million, down 1.3% year over year, missing the Zacks Consensus Estimate of $1,661 million.
Acetyl Intermediates segment sales were almost in line with the previous quarter and came in at $809 million. Adjusted EBIT decreased 16.5% sequentially to $66 million owing to flat volumes and prices as a result of weak global demand for acetyl derivative products in Europe and Asia. The company also faced raw material supply issue at one of its facilities along with company and customer turnarounds in vinyl acetate monomer (:VAM) that unfavorably impacted segment income.
Celanese expects the challenging economic conditions to persist throughout 2013. For 2013, it expects earnings growth on the back of company-specific initiatives to be consistent with its long-term growth plan of 12%. However, the company remains concerned that further decline in global demand would affect its future performance.
Celanese has taken up cost-cutting measures and the necessary steps to run its plants more efficiently to counter weak demand. Moreover, it is aggressively expanding its capacities in the emerging Asian markets. The company’s strong presence in the emerging markets should enable it to deliver incremental earnings in 2013.
Celanese currently carries a Zacks Rank #3 (Hold).
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