Q2 has been largely in accordance with our expectations and operatively in line to the previous quarters. Group´s revenue for Q2 is € 31,0 million and operating profit € 5,9 million. Group´s year-to-date revenue is € 63,9 million and operating profit € 11,4 million. In Q2 profitability at EBITDA-level has increased from 21 % to 23 % mainly due to favorable sales mix and robust demand for Forchem´s main products, TOR and TOFA.
Product margins have been also as expected but the increase in crude oil price at the end of 2016 has increased Forchem´s raw material cost for energy related contracts. This has caused a slight negative effect on the margins during the first half of the year (H1). After all, in H1 crude oil price has decreased to some degree, which, in turn, should help Forchem´s cost pressure related to raw materials in coming months. However, the potential future increase in crude oil price may put some pressure on Forchem´s refining margin, if product prices stay soft.
Due to increased activity in oil field operations, during H1 demand for CTO based products (specially CTO and TOFA) in that segment has been also quite high. Nevertheless, at the moment CTO availability is still good but might change due to potential increase in crude oil price and strengthening demand for CTO in the future.
Streamlining operations within group are ongoing. Working capital is still relatively high due to sales receivables.
This release is a summary of Forchem Oyj’s bondholder report concerning Q2/2017. The report is based on the terms and the conditions of the bond. The whole report including the tables is attached to this release and it is available at www.forchem.com/investor_area.
For more information:
Henrik Lindegrén, CFO, p. +358 44 032 1075, firstname.lastname@example.org