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UPDATE 1-Speciality plastics and consumer chemicals boost Solvay
October 25, 2012 / 6:16 AM / 5 years ago

UPDATE 1-Speciality plastics and consumer chemicals boost Solvay

* Q3 recurring core profit 554 mln euros vs forecast 515 mln

* Record results in consumer chemicals, speciality plastics

* Core chemicals also do well, PVC remains weak

* Keeps outlook of similar REBITDA in 2012 to 2011 (Adds details, background)

BRUSSELS, Oct 25 (Reuters) - Belgian chemicals and plastics maker Solvay reported a larger-than-expected core profit on Thursday, with record results from its consumer chemicals and speciality plastics.

The maker of PVC used for building and soda ash for glass said its third-quarter recurring core profit rose 4 percent to 554 million euros ($719 million). The average forecast in a Reuters poll of nine analysts was 515 million euros.

Solvay said that despite tough market conditions for PVC and a fragile economy, economies of scale and savings meant it expected to make a recurring core profit this year roughly the same as last year.

The company added a slowdown of some market segments and seasonal inventory management would impact the fourth quarter.

Solvay has suffered from a depressed construction sector buying less of its PVC for drainage pipes and window frames.

However, having bought French chemicals group Rhodia last year for 3.4 billion euros, it is set on course for strong growth in speciality chemicals and plastics.

It made record results in its speciality polymers division, due to strong demand for high performance materials in the oil and gas, water and healthcare sectors, and in its consumer chemicals division, which supplies ingredients for skin and hair care products.

Core chemicals such as soda ash, caustic soda and bleaching agent hydrogen peroxide also fared well, with core profit of the Essential Chemicals unit rising 28 percent due to higher volumes and prices.

Earlier on Thursday, German chemicals giant BASF stuck to its outlook for higher operating earnings this year, shored up by its oil and pesticides divisions, which are outweighing a decline in core chemicals.

Solvay agreed to sell its pharmaceutical activities to Abbott Laboratories in September 2009 for 4.5 billion euros with the aim of reinvesting in chemicals and plastics.

$1 = 0.7711 euros Reporting by Philip Blenkinsop; Editing by Mark Potter

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