Chemtura's agchems ahead in 2nd quarter

Date:08-25-2008

Chemtura’s agrochemical sales rose by 17.5% to $114 million in the second quarter of 2008. The increase was primarily due to growth in Europe and Latin America. The business benefited from strong agricultural demand globally and “continues to exceed expectations”, says Chemtura’s chairman and CEO Robert Wood. “Crop protection had another stellar quarter,” he adds.

Operating income was up by 60% to $24 million. The growth was due to higher volumes, reduced costs and favourable currency effects. Higher volumes and product mix effects boosted earnings by 27% and currency effects raised earnings by 13%. These gains were partly offset by a 7% reduction due to lower prices. Earnings also benefited from reduced bad debt expenses in Brazil. The company incurred a $5 million impact from bad debts in the same period last year.

The business recorded a profit margin of 21% in the second quarter of 2008 compared with a margin of 15% in the same period last year. Margins in the second half of the year are expected to be slightly lower than in the first half due to the greater influence of Chemtura’s North American business during that period, Mr Wood points out.

Chemtura is “comfortable” about the sustainability of its crop protection business, Mr Wood says. He is confident about Chemtura’s ability to secure new products from research-based companies that do not have the global distribution channels enjoyed by Chemtura. Approximately 50% of the company’s agrochemical products come from third parties, he notes.

Chemtura’s crop protection results ($ million)
2nd qtr ended June 30th	2007	% change	2008
Sales	97	+17.5	114
Operating profit	15	+60.0	24
Six months
Sales	178	+14.0	203
Operating profit	29	+55.2	45

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