AMSTERDAM, July 29 (Reuters) – Belgium’s Solvay (SOLB.BR), seeking acquisitions, rode rising plastics volumes to a 143 percent jump in quarterly operating profit from its plastics and chemicals units and said it expected plastics to remain strong.
Second-quarter recurring earnings before interest and tax (REBIT) from Solvay’s chemicals and plastics units was 194 million euros, beating the average estimate of 143 million euros from a Reuters poll.
Solvay, which produces PVC plastic used in construction and soda ash for glass, had restated REBIT from the two units of 80 million euros in the same period last year. Quarter-on-quarter REBIT rose 54 percent.
“The chemicals sector should realise a recurring operating result in line with that of last year, notwithstanding the price decreases,” the company said in a statement. “In plastics, the volume growth should support sharp REBIT expansion.”
Solvay, which sold its drugs unit to its U.S. partner Abbott (ABT.N) in September for 4.5 billion euros, reiterated its priority this year is to reinvest the cash, but gave no further hint on its acquisition plans.
Group REBIT was 183 million euros, a rise of 1 percent over last year, which included results from its drugs unit.
European chemicals companies have benefited from improved volumes as customers stock up again after the recession, while cost cuts have also helped to improved margins.
Germany’s BASF (BASF.DE), the world’s largest chemicals maker by sales, also saw improved volumes as it reported quarterly operating profit above estimates. [ID:nLDE66Q1HL]
BASF’s German peer Bayer (BAYGn.DE) and Switzerland’s Clariant (CLN.VX) are also opening their books on Thursday. (Reporting by Aaron Gray-Block)