22 April 2008 - Hercules Inc., a US manufacturer of chemical specialties, has reported a net income for Q1 2008 of USD 32.4 million, as compared to USD 80.3 million for Q1 2007.
Net sales in the first quarter of 2008 were USD 558.3 million, an increase of 11% from the same period last year.
“Profit from ongoing operations was flat, primarily as a result of the higher volume and the associated contribution margin, increased selling prices, lower pension expenses and favorable rates of exchange, offset by higher raw material, transportation and utility costs and planned and unplanned shutdowns”, the company said in a statement.
The company added that price increases did not fully offset higher raw material, freight and utility costs. Moreover, Hercules said that the price increases will not also offset a planned maintenance shutdown at its Doel, Belgium methylcellulose plant, as well as the January fire that hit one of its methylcellulose production lines in China, at Hercules Tianpu Chemicals, a 40% owned joint venture company, as reported by FLEXNEWS.
"We remain optimistic about revenue, earnings and cash flow growth in 2008," said Hercules CEO Craig A. Rogerson.
"We expect significant raw material, freight and utility cost headwinds, but expect announced and additional price increases to partially offset these costs. Despite these challenges, we expect profitability to improve through higher utilization of our recent capacity expansions and the impact of our new product introductions. We continue to pursue acquisition opportunities to expand our product offerings and accelerate value creation for our shareholders."
Methylcellulose, and other cellulose derivatives are used in the manufacture of low calorie foods such as imitation syrups and salad dressings low in calories.