Europe's chemical firms report tough first half

Abstract

The second quarter of 1996 proved a stumbling block for many European chemical companies. As the financial results for the first half begin trickling in from major companies, it's clear that their sales and earnings declined from the year-earlier period. Predictions at this point for the rest of the year are cautious. Many analysts say it is impossible to predict confidently either improvement or deterioration; they cite the many uncertainties in factors influencing chemical industry performance—such as economic conditions in the European marketplace, feedstock and product price levels, and inventory levels. First-quarter results continued the downturn that began in fourth-quarter 1995. And for most companies, the second quarter of this year reinforced that trend. For example, net profits for U.K.-based ICI were down 26% for the first half—but down 39% for the second quarter. Norway's Norsk Hydro reported a 23% drop in chemical operating profits for the first half—but a 93% decline in the second ...