Petrochemical
Solvay announces £1.5 billion impairment charge amid low sales
Sales down by 20% across April and May with similar demand trend seen for June as well.
- By ICN Bureau
| June 24, 2020
Solvay Group is likely to take an impairment charge of £1.5 billion as sales were set to fall by around 20% in the second quarter due to the impact of the COVID-19 pandemic, it said on Wednesday.
The company said challenges had increased in the April-June period from the first three months of 2020, with sales down 20% across April and May and a similar demand trend seen for June.
Its businesses related to oil and gas, automotive and aerospace were the hardest hit, with revenues down by about 40%.
Businesses related to construction and mining were off some 20%, but healthcare, agri-food, home and personal care and electronics markets had resisted well.
Approximately 80% of the non-cash impairment is associated with the goodwill resulting from the Cytec acquisition, and the balance is related to various tangible & intangible assets.
Solvay said it would conclude its analysis and provide additional details with its first-half results on July 29.
llham Kadri, CEO, Solvay commented, "We continue to act decisively to mitigate the effects of COVID-19 and we remain unrelenting in our focus on free cash flow generation, cost reduction, and serving our customers. We are accelerating delivery of our G.R.O.W. strategic programs to deliver superior growth through our leadership positions and innovation."
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