Weak chemicals sales at Omnova Solutions
US-based producer of emulsion polymers, specialty chemicals, and decorative and functional surfaces Omnova Solutions Inc. has reported net income of $3.3 million for the third quarter ended August 31, compared with $1.4 million for the third quarter of 2005.
Net sales increased $1.8 million to $208.8 million for the third quarter compared with $207 million during the same period last year. Gross profit was $43.4 million, or 20.8% of net sales compared with $42.1 million, or 20.3% of net sales, in the prior year period.
Net sales for the Performance Chemicals segment during the third quarter decreased 7.8% to $109.6 million versus $118.9 million in 2005, driven by a 10.5% reduction in volume due to weaker demand across most product lines. The reduction in volume was partially offset by a 2.7% higher average unit selling price. Segment operating profit was $8.2 million for the third quarter of 2006 compared with $9.3 million for the third quarter of 2005. Results were affected by lower volumes of $4 million, higher raw material costs of $1.8 million primarily for butadiene and acrylic raw materials and higher utilities and transportation costs of $1.2 million.
The specialty chemical product lines experienced significant volume declines. New product introductions, trialling activity and toll manufacturing opportunities are underway to improve specialty volumes.
