Ashland reports increase in sales profits

Ashland reports increase in sales and profits

4:08 PM, 25th May 2011
Ashland reports increase in sales and profits
James J O’Brien, Chairman and CEO, Ashland.

• Sales increased 9 per cent to $ 1,557 million

• Adjusted operating income was $ 128 million versus $ 132 million in the prior year

• Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $ 192 million versus $ 199 million a year ago

• Adjusted EPS from continuing operations increased 2 per cent to 86 cents.


COVINGTON, US: Ashland Inc for its 2011 second quarter, reported sales of $ 1,557 million, operating income of $ 122 million and net income of $ 353 million ($ 4.39 per share). Net income included income from discontinued operations of $ 257 million aftertax ($ 3.19 per share), primarily related to the sale of Ashland Distribution, which closed on March 31, 2011.


“I am encouraged by our progress in two key areas. First, volumes and sales grew by 5 per cent and 9 per cent, respectively, over the prior-year quarter. Second, our pricing actions enabled us to maintain overall margins sequentially despite a significant increase in raw material costs. Due to the general success of our ongoing pricing efforts against these headwinds, we were able to generate $ 192 million of EBITDA and $ 72 million of free cash flow during the March 2011 quarter,” said James J O’Brien, Chairman and CEO, Ashland.


Ashland aqualon functional ingredients recorded sales of $ 270 million in the March 2011 quarter. Gross profit as a percent of sales was 33.7 per cent in the March 2011 quarter versus 34.9 per cent in the year-ago quarter. Ashland hercules water technologies’ sales were $ 471 million in the March 2011 quarter, up 5 per cent over the year-ago quarter and up 4 per cent sequentially. Gross profit as a percent of sales of 31.3 per cent was 320 basis points below the year-ago quarter.


Ashland performance materials achieved sales growth of 7 per cent over the year-ago March quarter to $ 325 million. Sales were up 23 per cent over the prior year. Gross profit as a percent of sales of 13.9 per cent, which excludes key items, declined versus both the March and December 2010 quarters.


Ashland consumer markets’ sales of $ 491 million increased 14 per cent over the year-ago March quarter on 3-per cent growth in lubricant volume and ongoing pricing efforts. All market channels showed solid sales growth over the prior year. Sequentially, sales grew 12 per cent and lubricant volume increased 11 per cent, in line with normal seasonality. Gross profit as a percent of sales fell 370 basis points versus the March 2010 quarter and 160 basis points sequentially to 29.3 per cent, due to increased raw material costs during the quarter.


“Three of our four commercial units have been repeatedly successful in recovering raw material costs and we expect this to continue. While water technologies has lagged in its cost recovery, several changes were made during the quarter that will enable improved performance going forward. Given our strong cash-generating capabilities, significant liquidity and debt capacity, we are well-positioned to take advantage of the most value-creating opportunities for our shareholders,” said O’Brien.

(C) WOC News



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