MIDDLEBURY, Conn. (Feb. 26, 2009)—Specialty chemicals supplier Chemtura Corp. has reported a net loss of $737 million on sales of $690 million for the fourth quarter of 2008, and a net loss on a managed basis of $35 million.
A sharp decline in sales in November and December made the fourth quarter "very challenging," Craig Rogerson, chairman, president and CEO, said in Chemtura's results statement.
He said the company's urethanes prepolymers business was more affected by the recession than other parts of its performance additives business.
Chemtura is involved in discussions on asset sales to be able to pay a $370 million charge due in July on its loans. The group's urethanes business and its significant polymer additives units are not in the two units reported as being on the block.
A recent story in the South China Morning Post said two Chinese corporations were evaluating the assets that Chemtura has offered for sale.
Chemtura has not commented on the specific units for sale, but Rogerson said it has some potential suitors.
Chemtura is working on reducing fixed costs and tightly managing manufacturing, Rogerson said. It is cutting its professional and administrative headcount by about 20 percent, and managing manufacturing plants on a "make-to-order" basis, said the Chemtura chief.
This gave substantial inventory reductions of $109 million or 15 percent in the quarter.
Performance Specialties dropped by 8 percent or $19 million, and operating profit decreased 32 percent or $11 million compared with the fourth quarter of 2007. Lower sales volumes of $39 million were the main cause of the lower revenue, offset somewhat by higher selling prices of $24 million.
Chemtura said its major Polymer Additives segment saw the greatest with customers shutting plants temporarily to meet reduced demand and cut inventory.
Polymer Additives' revenues decreased by 35 percent compared with Q4 of 2007, which included a $46 million reduction from the divestiture of the oleochemicals and organic peroxides businesses. Lower sales volumes of $129 million were partially offset by higher selling prices of $25 million.
Operating profit on a managed basis declined $58 million compared to the fourth quarter of 2007, resulting in an operating loss of $38 million.