Perstorp, Sweden -- Sales at speciality chemicals group Perstorp rose 3 percent during 2009 to SEK 12 542 million ($1731 million). But lower volumes and a price fall for TDI (toluene diisocyanate) affected the group's operating profit before depreciation and amortisation (EBITDA), which reached SEK 986 million (SEK 1670 million for 2008), the group said in its 2009 results statement.
Adjusted for non-recurring items, the profit was SEK 1100 million (SEK 1723 million: 2008).
During 2009, Perstorp said, it set up a cost savings programme and efficiency improvements, which resulted in a 20 percent cut in the workforce and major cost savings.
Perstorp said it was strongly affected by the financial crisis, primarily during the first quarter, with lower volumes and falling prices, adding that recovery began at the start of the second quarter. The group's 3 percent sales rise result from acquisitions, and Perstorp noted that, on a like for like basis, its sales decreased by 18 percent during 2009 -- 9 percent of that from a decline in volumes.
"Last year, we focused on improving efficiency and implementing rationalisations, in addition to developing a solid strategic direction for Perstorp for the next years. This work, together with a reinforced balance sheet from shareholders' contributions in 2009, delivered a strong springboard that makes us well prepared to take on 2010 with confidence," commented president and ceo Martin Lundin.
During the fourth quarter Perstorp also reached an agreement with its banks to improve the group's financial flexibility, including new financial covenants.
Perstorp's results statement noted that the dramatic fall in demand "for large parts of our product portfolio at the start of the year prompted us to accentuate the savings measures we had begun." These included a programme that will cut costs by more than SEK 300 million annually and a reduction in purchasing costs by over SEK 150 million a year, outside of purchases of major raw materials.
Some expansions continued, for example, thanks to growing demand, Perstorp decided to expand production of caprolactones in Warrington, UK, and a new plant will be ready to begin production in 2011.
Perstorp pointed out that during 2009, all players in the value chain of value had to work with much shorter lead times - "at times customers had just a few days' intermediates in stock - and pricing for many raw materials went from quarterly to monthly."
Lower demand, partly due to stock cutbacks in the customer chain, led to a loss of volume of around 25 percent during the first quarter. In the second quarter, volumes started recovering, and for the year as a whole Perstorp's sales volume fell by 9 percent compared with the previous year.
Looking at individual products, Perstorp's basic polyols had a difficult start of the year, but volumes returned later on. Because of the price fall for TDI noted earlier, the year was "very difficult for isocyanates - a very significant product both in terms of sales and margins," the company said. It added that Perstorp now "has a better grip on the market and the curve is pointing upwards again."