May 18, 2011

Perstorp reports continued positive sales performance in Q1

Specialty chemicals company Perstorp reports the first quarter of 2011 as a period that has been characterised by a continued positive sales performance across the portfolio, coupled with an increase in raw material prices and a further strengthening of the Swedish krona.

Margins have remained healthy, further demonstrating the strength of the Perstorp business model.

Strong market growth led to accelerated demand and short supplies for several of Perstorp's products during the period. Coupled with the political unrest in North Africa and the Middle East, this caused significant raw material price hikes.

The Perstorp Group's sales rose by 9% to SEK3,947 million (US$626 million), despite the Swedish krona strengthening considerably compared with the corresponding period last year, giving a negative currency effect of 12%. Operating earnings before depreciation and amortisation was SEK411 million (US$65 million) adjusted for items affecting comparability. The currency effect was SEK-160 million (-US$25 million), partly due to consolidation effects and partly because the US$ weakened over the quarter which gave negative revaluation effects.

The purchased Penta business of the US specialty chemicals company Ashland Inc. is now being integrated into the Perstorp Group, resulting in increased Penta volumes and synergy effects. At the start of the year, Perstorp decided to extend its capacity for HDI-derivatives and 2-EHA in Europe and Asia, by setting up production at the Group's plant in Singapore. Production is expected to start in 2013.

After the end of the quarter, a decision was taken to proceed with the investment in a new production plant for Valeraldehyde and its derivatives 2-PH and DPHP. The plant is scheduled to be on stream in 2014. An expansion of the Group's Neo production, through a new plant in China, was also decided after the end of the quarter.