Strong Q2 for Nova Chemicals…but the rest of 2010 might not be so bright
It was a good second quarter for Nova Chemicals, but the company doesn’t expect such a favorable outco...
It was a good second quarter for Nova Chemicals, but the company doesn’t expect such a favorable outcome for the rest of the year.
The Calgary-based chemical supplier reported US$51 million in net income in the second quarter as revenue from continuing operations increased by nearly 58 per cent to US$1.58 billion. This compares with a loss of US$83 million in Q2 2009.
The second-quarter profit was mainly due to Nova’s olefins/polyolefins business unit, which posted US$251 million of operating income, up from US$81 million during the second quarter of 2009. “The improvement in both comparisons was due to selling prices increasing more than feedstock costs, and improved demand,” the company said in a statement.
But in a conference call with analysts, CEO Randy Woelfel predicted a less rosy result for the remainder of the year. “In the first half of the year, margins for ethylene improved rapidly due to a shortage of supply caused by unplanned s by some producers but that won´t continue,” he said. Woelfel also said that Nova remains cautious about additional supplies coming on stream in the Middle East and Asia, and their potential impact on global pricing. “On balance, while we´re encouraged by the market dynamics so far in 2010, uncertainties remain in the outlook,” he explained.