By Liz White, UT staffMajor Belgian foamer Recticel has confirmed its earlier prediction of strong earnings growth in Europe, offset by negative automotive results in the US. Sales for Recticel in 2005 were 9 percent up on last year's at Euro 1392 million, while its earnings (EBITDA) were stable at Euro 82 million. An impairment charge of Euro 12.7 million for the group's US automotive operations contributed to Recticel's reduced EBIT of Euro 8.8 million, down from Euro 32.6 million in 2004. Recticel said the first half's negative impact of raw materials price rises was followed by a second half in which the group "performed well … in all its European activities." This boosted EBITDA in Europe by 16.7 percent to Euro 104.3 million, and EBIT by 25.4 percent to Euro 52.1 million. But Recticel said "start-up and volume problems in the American automotive sector more than neutralised this good performance, leading to a net loss." The Euro 12.7 million impairment figure is the entire capitalised development and start-up costs for Recticel's American automotive projects. During the year, Recticel bought flexible foamer Akoestikon in the Netherlands, and sold its 49 percent interest in its Ceadesa bedding joint venture in Spain with Pikolin. Another change during the year was the partial sale of the automotive window encapsulation business to Asahi Glass Co. of Japan. Recticel's three traditional operating sectors-flexible foam, bedding and insulation-performed well. In automotive, the European activities in all subsectors made a positive contribution to EBITDA, Recticel said. The poor US automotive performance followed:- higher start-up costs in the Tuscaloosa plant (Mercedes M and R). Improvements, although "noticeable and promising," were not able to compensate for the loss in H1, commented Recticel; - lower than expected volumes (-50 percent) for one of the GM models; - Chapter 11 at Delphi, which currently prevents collection of an outstanding invoice. Meanwhile, in spite of additional restructuring costs in Belgium, Germany and the Czech Republic, European EBITDA rose by Euro 14.9 million compared to 2004, but fell in the US by Euro 15.2 million. Recticel said it also suffered a loss on the sale of its Foamex shares, selling its final 4.15 percent stake in September 2005"