Q4 has been operatively very similar to the previous quarters of 2017 and in accordance with Forchem’s expectations. Group’s revenue for Q4 is € 29,7 million and operating profit € 4,1 million. Group’s year-to-date revenue is € 126,6 million and operating profit is € 19,7 million.
Forchem’s profitability at EBITDA-level regarding whole year 2017 is 20 % and it is in line to the previous year (21 % in 2016). Regarding Q4, profitability at EBITDA-level is 18 %. The main reason for the lower EBITDA-level in Q4 is normal seasonal cyclicality both in sales mix and generally in operations.
The annual revenue has increased mainly due to higher sales volumes. Demand for all the products has been robust. Furthermore, during Q4 there have been no major changes in refining margin compared to the previous quarters.
The increase in crude oil price during Q3 has not significantly depressed the refining margin. However, crude oil price has continued rising and the increased oil price will increase Forchem’s raw material cost directly for energy related contracts in the coming months. The higher crude oil price has also expanded activity in oil field operations, which raises demand for CTO based products. Furthermore, although the final decision regarding CTO classification will be given by Trilogue meeting during 2018, European Parliament already decided in January 2018 that the classification should remain as it has been.
Hence, as already reported in Q3.2017 Bondholder Report, CTO market has tightened and if crude oil price stays at the current level or even rises, it might put some pressure on Forchem’s margin in the future, if product price stay soft.
This release is a summary of Forchem Oyj’s bondholder report concerning Q4/2017. 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.
The complete Financial Statements will be published on 30 April 2018.
For more information:
Henrik Lindegrén, CFO, p. +358 44 032 1075, firstname.lastname@example.org