Nova Chemicals reports profitable first quarter

Calgary, Alta.-based Nova Chemicals Corporation announced a net income of US$44 million for the first quarter of 2007. The company had previously reported net losses of US$781 million in the fourth quarter of 2006. Additionally, in the first quarter of 2006, the company reported a net loss of US$4 million.

The results for the first quarter of 2007 included an unrealized gain on feedstock derivatives totaling US$17 million after-tax, and a negative impact of US$8 million after-tax related to the Canadian National Railway strike earlier this year.

“We saw a sharp improvement in overall business results in March which we expect to carry over into a strong second quarter,” said Nova Chemicals president and CEO Jeff Lipton.

Nova Chemicals also expanded its joint ventures in the first quarter of 2007. The company signed a letter of intent with Aux Sable Canada Ltd. to develop a new ethane extraction plant in Alberta, which will increase Nova Chemicals’s ethane feedstock supply by an expected 25 per cent by 2010. Nova Chemicals also announced its plans to expand its existing European joint venture with INEOS to include North American styrene and solid polystyrene assets.

“With the expansion of the joint venture with INEOS, we look forward to building upon our success in Europe to rapidly remove costs and continue to expand the positive operating income from the North American business,” said Lipton.

The first quarter results exceeded expectations, and gave the company’s stock a boost. Nova Chemicals’s stock was up $3.70, or approximately 11 per cent, at $37.28 on the Toronto Stock Exchange this afternoon.