HOUSTON—Kraton Corp., manufacturer of styrenic block copolymers and specialty polymers, disclosed full-year consolidated net income of $70.5 million for the year ended Dec. 31, compared with $92.6 million the year before.
Fourth-quarter 2018 earnings were down sharply for Kraton, to $19.3 million compared with $69.9 million in the fourth quarter of 2017, according to the financial results released Feb. 27.
Operating income for the company's polymer segment in the fourth quarter was $21.2 million, down 6.7 percent from the fourth quarter of 2017. For Kraton's chemical segment, operating income was $12.2 million, down 31.6 percent, the company said.
Kraton's fourth-quarter results were in line with the company's expectations, said Kevin Fogarty, Kraton CEO and president.
The results reflected strong underlying demand fundamentals, improved profitability in chemicals and lower sales in polymers caused largely by production disruptions at Kraton's facility in Wesseling, Germany, according to Fogarty.
Kraton's adjusted earnings before interest, tax, depreciation and amortization for full-year 2018 was $378 million, compared with $372 million for full-year 2017, Fogarty said.
Adjusted EBITDA for the company's chemical segment was $163 million, up 8 percent from 2017 and the first full-year improvement in chemicals since Kraton acquired that segment in 2016, according to Fogarty.
In polymers, adjusted EBITDA fell $8 million to $215 million, Fogarty said. This reflected production challenges in 2018's second half, lower sales volumes in non-core paving markets, lower overall demand in China, weakness in North American automotive applications and higher transportation and logistics costs, he said.
Volume in Kraton's Cariflex polyisoprene products business was up 8 percent in 2018 over 2017, according to Fogarty.
"Based on our current outlook for Cariflex, we believe we have an opportunity for further expansion," he said.
Fogarty's remarks in the Feb. 27 press release seemed to contradict Kraton's Feb. 19 announcement that it might consider the sale of the Cariflex business.