Arkema Inc. reported a significant drop in its earnings due to COVID-19 whereby net income fell by 53% and stood at €90 million in second quarter (€192 million in Q2 ’19), representing €1.18 per share.

 

The company's EBITDA is €286 million (€407 million in Q2 ’19) and EBITDA margin of 15%, a resilient performance in view of the context of solid performance of Advanced Materials, with an EBITDA margin of 20%, sharp rebound for Bostik in June and benefits of rapidly implemented interim fixed cost reduction initiatives. 

 

Arkema has excellent free cash flow, at €288 million (€90 million in Q2’19), reflecting strict management of working capital and capital expenditure whereas Net debt down sharply relative to end-March 2020 at €2,134 million (of which €1 billion in hybrid bonds), including the €168 million dividend payment and €246 million in net proceeds from the divestment of the Functional Polyolefins business. 

 

Further progress in the strategy of refocusing on Specialty Materials, with the finalization of the divestment of the Functional Polyolefins business to the South-Korea based corporation SK, and the proposed acquisition of Fixatti in Adhesive Solutions announced on 20 July.

 

Chairman and CEO Thierry Le Henaff said, “The second quarter was marked by the context of COVID-19 and the lockdown measures imposed in many countries. Arkema’s sales were clearly impacted by this situation, but the decline was contained thanks to the Group’s worldwide positioning and the diversity of its end markets. The Group demonstrated its resilience in this unprecedented context, thereby validating its strategy of refocusing its business portfolio toward specialties.

 

"For the short-term, we concentrated on the elements that are within our control, putting in place decisive initiatives to reduce costs and tightly control working capital and capital expenditure. This enabled us to deliver a robust financial performance in the second quarter and achieve a high level of cash generation despite the challenging operating environment," commented Henaff.  

 

In the second half of the year, while expecting to see a gradual improvement in end markets, Arkema will continue its cost-saving and cash-generation efforts in an environment still marked by low visibility with regards to the evolution and effects of the pandemic, added Henaff. 

 

Our organic growth ambitions have been supported by the partnership with Nutrien, the progress made in the construction of our bio-based polymer plant in Singapore despite the Covid-19 pandemic, and the acceleration of sustainable innovation projects in Specialty Materials said Henaff.