Mar 24, 2010
Cognis swings to yearly profit, cuts debt
Mar 24, 2010
MONHEIM, Germany, March 24 (Reuters) - Cognis [COGNS.UL] cut its debt burden and swung to a profit last year, bolstering its owners' plans to divest the German maker of additives for cosmetics and detergents.
Net debt fell to 1.87 billion euros ($2.51 billion) by the end of 2009 from 2.26 billion euros a year earlier, the group said on Wednesday 24 March, adding that it was working on a draft prospectus for an initial public offering (IPO).
Cognis's owners Permira [PERM.UL] and Goldman Sachs Capital Partners (GS.N) have launched a campaign to sell the company outright even as it prepares to go public, sources said this month.
Cognis said full-year net income was 25 million euros compared with a loss of 49 million euros in 2008, as it cut costs and benefited from lower raw-material prices.
Cognis's closest rival, British maker of personal care chemicals and additives Croda International (CRDA.L), posted a full year 10.5 percent rise in adjusted pretax profit on 106.4 million pounds ($159.7 million) last month sending its shares to an all-time high.
Cognis's Chief Executive Antonio Trius said operating income, or adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA), should increase further in 2010 after edging up 3.6 percent in 2009.
"We expect the markets to remain volatile in 2010, although we have made an excellent start to 2010," Trius said.
The company is hobbled by negative equity, with liabilities exceeding assets by 762 million euros at the end of last year. The deficit narrowed from 811 million euros at end-2008.
CEO Trius told business daily Boersen-Zeitung last month the group was ready for an IPO, saying all proceeds would go to creditors, offering no immediate exit to its private equity owners.
As part of a drive to cut debt, Cognis bought back so-called Payment-In-Kind (PIK) notes -- bull-market instruments that convert interest payments into new debt -- below their nominal value on the open market.
In 2008 Cognis hived off its plant oil and textile chemicals businesses. (Reporting by Ludwig Burger; Editing by Michael Shields and Sharon Lindores) ($1=.7439 Euro) ($1=.6664 Pound)
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