Ciba Posts $35m Q4 Loss on Demand Collapse
SINGAPORE (ICIS news)--Ciba has booked a net loss of Swiss Franc (Swfr)41m ($35.3m) for the quarter to December 2008 as demand substantially weakened during the period, the Switzerland-based specialty chemicals company said on Tuesday.
The company reversed a net profit of Swfr84m recorded in the same period a year earlier.
“We faced some significant challenges in 2008, with raw material costs reaching unprecedented levels in the first half and a dramatic drop in demand towards the end of the year, as the economic downturn took hold,” said Brendan Cummins, CEO of Ciba.
Net sales in the October-to-December 2008 period tumbled 19% on year to Swfr1.28bn as the company’s key markets were hit by the economic slump.
Ciba’s net loss for the period included a Swfr36m restructuring charge and Swfr39m of expected related to its acquisition by German chemical firm BASF.
“The outlook for the economy over the next few months is very unclear. Raw material costs have started to ease, but we are not expecting market demand to show any meaningful recovery until late in 2009 at the earliest,” Cummins said.
“Our focus is to make sure our production capacity is well balanced with the reduced demand, and that the fundamental structures of our business are fully optimized,” he added.
Separately, Ciba affirmed that the acquisition by BASF is on track to close in the first quarter of the year.
“There are still outstanding regulatory approvals from the competition authorities required before BASF can take full control of Ciba, but these are expected to come through in time to close the transaction in the first quarter of 2009,” Ciba said.
The company reversed a net profit of Swfr84m recorded in the same period a year earlier.
“We faced some significant challenges in 2008, with raw material costs reaching unprecedented levels in the first half and a dramatic drop in demand towards the end of the year, as the economic downturn took hold,” said Brendan Cummins, CEO of Ciba.
Net sales in the October-to-December 2008 period tumbled 19% on year to Swfr1.28bn as the company’s key markets were hit by the economic slump.
Ciba’s net loss for the period included a Swfr36m restructuring charge and Swfr39m of expected related to its acquisition by German chemical firm BASF.
“The outlook for the economy over the next few months is very unclear. Raw material costs have started to ease, but we are not expecting market demand to show any meaningful recovery until late in 2009 at the earliest,” Cummins said.
“Our focus is to make sure our production capacity is well balanced with the reduced demand, and that the fundamental structures of our business are fully optimized,” he added.
Separately, Ciba affirmed that the acquisition by BASF is on track to close in the first quarter of the year.
“There are still outstanding regulatory approvals from the competition authorities required before BASF can take full control of Ciba, but these are expected to come through in time to close the transaction in the first quarter of 2009,” Ciba said.
source: www.ICIS.com
