Cognis Posts First-half Results

In the first six months of 2007, global specialty chemicals company Cognis increased its net external sales by 6.2% to €1,821 million on a comparable currency basis. Currency effects reduced the sales growth to 3.5%, reaching €1,775 million. The operating result of €214 million could match the high level of the first half year in 2006 in spite of a massive rise in raw material costs, especially for natural oils and fats. Together with a successful cost management, the company states that the necessary selling price increases could be achieved in many areas but will show effect with the usual time delay.

“We are pleased with the first half-year. Our care chemicals, nutrition & health and functional products strategic business units, with their focus on innovation-driven growth markets, have made particularly important contributions to our encouraging figures,” said Antonio Trius, CEO, Cognis. “Furthermore, we were able to conduct a successful refinancing. In doing so, we achieved a considerable reduction in financing costs of about €74 million on average per year and improved our liquidity position going forward.

“We expect to achieve further growth in sales and earnings in the second half of the year. The good results achieved in July show that we could partly make up for the higher raw material costs and give us particular reason to look ahead to the rest of 2007 with confidence.”

Excluding currency effects, sales went up 6.9% percent to €728 million in care chemicals, Cognis’ largest SBU. The main drivers, according to the company, were the continuing increase in sales of innovative specialties and strong sales of primary surfactants and silicates. Fatty alcohol sales remained under pressure, due to the intense competition in this market. Selling price increases to counter higher raw material cost could be achieved successfully.
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