Albermarle cites favourable pricing and pharma sales as factor in Q4 rev growth
The fine chemicals division – which makes active pharmaceutical ingredients (APIs), drug intermediates, Performance and Agri chemicals - brought in $208.5m (€160.5m) for the quarter, up 36 per cent on the comparable period in 2010, with income climbing 60 per cent to $42.6m.
For completeness Albermarle's industrial catalysts business saw sales increase 25 per cent to $289.5m and income rise 43 per cent to $83.6m, while its polymer solutions unit posted a 5 per cent drop in revenues – to $209.3m – and a 28 per cent fall in income to $36.6m.
However – to focus on the Pharma related side of the business - Albermarle said in its results statement that the increase in fine chemistry revenues in Q4 was “due mainly to favourable volumes and pricing.”
COO John Steitz told analysts that: “Growth was driven in part by doubling of long-term programs in the Specialty Materials and Ag sectors … and good specialty pharmaceutical results were also important” during the Q4 earnings call (published by Seeking Alpha).
Combined the comments suggest Albermarle’s decision – last September - to increase generic active pharmaceutical ingredients (APIs) prices by 8 to 12 per cent depending on the particular ingredient has had a positive impact on its financial performance.
At the time Albermarle – whose decision to hike API prices followed similar moves by BASFandISP- said the “increase will ensure that through a challenging economic environment, we are able to maintain the superior quality, regulatory status and services that our customers require.”
Outlook 2012
Steitz also discussed Albermarle’s fine chemicals unit’s prospects in 2012, predicting that the positive trend seen in the fourth quarter is set to continue.
“Fine Chemistry is set for another excellent year of growth in 2012 with a great pipeline of custom projects within Fine Chemistry Services and a healthy portfolio of exciting new advancements of bromine chemistry into food protection, energy and stewardship of our environment.”
Morningstar equity analyst Jong Park was similarly positive, suggesting in a note to analysts that: “We think the 2012 outlook for fine chemistry looks bright given the resilient end-market demand for this segment's bulk pharmaceutical ingredients such as ibuprofen, as well as growth in demand for Albemarle's bromine completion fluids.”
Albermarle was not available for comment ahead of publication.
