An improvement in the performance of its industrial and textile fibres operations plus the contribution from Courtaulds helped Akzo's Acordis fibres business boost operating profits by 52% to Dfl 141m. Acordis, which is being prepared for demerger, increased sales by 21% to Dfl 4.3bn of which Courtaulds accounted for Dfl 1bn. Excluding the Courtaulds related sales, however, revenues declined 6% due to divestments. Volumes and average selling prices were flat on 1997.
The group plans to float Acordis in the second half of the year, but was unable to give more precise information about the timing. If the business is floated at the bottom of the fibre market's cycle, shareholders will be pleased but it will be a poor transaction for Akzo, said van Lede. But if it is sold at the top of the cycle, shareholders will be critical, he said. "Whatever we do the timing will never be right."
Akzo explained that high capacity utilisation, cost reduction and improved productivity boosted industrial fibres earnings. A turnaround in the viscose filament business and an improvement in non-wovens boosted textile fibres. However, the Asian crisis hit results from Aramid Products and the cost of introducing new products meant that Membrana's results were down on 1997.
The Tencel fibre business remained depressed because of overcapacity.
By: Neil Sinclair 22 February 1999 12:15 [Source: ICIS news]