COLOMBES, France—Despite a 7.3 percent decline in sales, Arkema S.A.'s income for the second quarter of 2016 increased by 8.9 percent, the company said in its financial report.
Net income increased by about $12 million to $148.4 million, however the firm's sales dropped to $2.16 billion compared to $2.33 billion in the second quarter of 2015. Arkema said volumes grew by 2.6 percent, but a 5.2 percent drop in price effect and a 2.2 percent effect from its divestment of Sunclear in the fourth quarter of 2015 led to the overall decline.
The firm's EBITDA margin increased to 17.5 percent, reporting a 6.6 percent increase of EBITDA to $377.7 million in the second quarter.
Arkema's volume growth came largely from its adhesives unit, Bostik S.A., which has expanded significantly with additional capacity in Europe and Asia since Arkema acquired the unit in December 2014. Bostik recently reached an agreement to acquire adhesives and sealants manufacturer Den Braven for about $534 million in cash, pending necessary approvals
“These results reflect in particular the ongoing rapid ramp-up of Bostik with a profitability which further improves,” Chairman and CEO Thierry Le Henaff said in a statement. “The planned acquisition of Den Braven, announced in July, will reinforce this activity in the coming years and contribute to the strong growth ambition for our adhesives.”
The firm's High Performance Materials Segment experienced a 3.1 percent decline in sales, to $973.5 million, but it said the unit's 18.8 percent EBITDA margin reflects the progress made at Bostik and the excellent performance of the division's other activities. EBITDA increased 10.7 percent compared to 2015, to $182.8 million, with Bostik's EBITDA margin standing at 13.8 percent for the quarter.
Volumes increased by 2.2 percent, also driven by expansion at Bostik in addition to innovation in technical polymers.
The firm's other two units also experienced declines in sales. Industrial Specialties dropped 11 percent to $674.5 million and its Coating Solutions unit dropped 10.2 percent to $506.2 million.
Based in Colombes, Arkema employs about 19,000 with operations in nearly 50 countries.