Northfield, Illinois -- Polyester polyol producer Stepan Co. has reported profits down by $0.4 million in its polymers business for the second quarter of 2010 (Q2), compared to the same period last year.
Stepan said lower margins for polyol products offset the 16-percent increase in polymer sales gained largely from improved volumes in rigid insulation foam for flat-roofed commercial construction.
Polyol margins declined in Europe and North America due to higher raw material costs, competitive pressure and the effect of foreign currency translation, a 27 July results statement said.
Phthalic anhydride (PA) profitability improved on a 10-percent increase in sales volume. Demand for PA-based unsaturated polyester resins in the automotive and housing industries improved from last year's recessionary conditions, Stepan said.
Overall, the company reported sales up by 14 percent to $366.5 million, compared to Q2 2009, although income for the quarter was down to $17.0 million, compared to $19.6 million for the prior year record quarter.
Net income excluding deferred compensation was $19.2 million compared with $22.4 million last year. Sales volume grew six percent with both the surfactant and polymer groups posting higher volumes led by the significantly higher volumes of polyol used in flat-roof rigid foam insulation, the statement said.
"Year-to-date net income is up nine percent over a strong 2009 first half," said Quinn Stepan, president and ceo. "The decline in second quarter results is due to pressure on margins in Europe combined with higher expenses to support growth initiatives through acquisitions and increased research within our innovation portfolio. Price increases were implemented in the third quarter to attempt to recover recent raw material cost increases," he added. (RD)