Bayer MaterialScience burdened by persisting high raw material costs

Sales of the high-tech materials business rose by 3.8 percent (Fx & portfolio adj. 2.5 percent) in the first quarter, to EUR 2,788 million (Q1 2011: EUR 2,686 million). "Bayer MaterialScience achieved higher volumes in all regions, while selling prices as a whole were level with the prior-year quarter," said Dekkers. Price increases in the Latin America/Africa/Middle East, North America and Europe regions offset declines in Asia/Pacific. "However, earnings of MaterialScience remained under pressure because of high raw material costs," he explained.

Business with raw materials for foams (Polyurethanes) improved by 4.7 percent (Fx & portfolio adj.), while high-tech plastics (Polycarbonates) were down by 4.2 percent (Fx & portfolio adj.) mainly as a result of lower selling prices. Sales of raw materials for coatings, adhesives and specialties improved by 3.9 percent (Fx & portfolio adj.) thanks to growth in all product groups, while the Industrial Operations unit grew by 8.9 percent (Fx & portfolio adj.).

EBITDA before special items of Bayer MaterialScience was down by 19.4 percent year on year at EUR 278 million (Q1 2011: EUR 345 million). However, earnings more than doubled against the weak fourth quarter of 2011 (EUR 106 million). Earnings were diminished above all by a rise in raw material costs, while higher operating costs also had a negative impact. Positive effects came from efficiency improvement programs, increased volumes and one-time gains of EUR 19 million (Q1 2011: EUR 0 million) on the acquisition of the remaining interest in the joint venture Baulé S.A.S.

Source: Bayer MaterialScience