A bitter pill for Jeff Lipton, retiring CEO of polyethylene and polystyrene producer Nova Chemicals (Calgary, Alberta / Canada; www.novachem.com) was the company’s Q4 net 2008 loss of USD 214m on sales of USD 1.2 bn (from USD 1.8 bn in Q4 2007). This compares with earnings of USD 126m in Q4 2007 and even in Q3 2008, net earnings held up well at USD 98m. The weak quarterly performance was spread across all segments, led by Olefins/Polyolefins.

Nova’s full-year sales totalled USD 7.4 bn in 2008, up from USD 6.7 bn in 2007. However, adjusted EBITDA from the businesses fell by half, to USD 453m from USD 987m in 2007. Hardest hit was the Olefins/Polyolefins segment, where EBITDA plummeted to USD 576m from USD 975m in 2007. The Ineos Nova joint venture plunged into the red with an EBITDA loss of USD 78m, compared with a profit of USD 17m the year before. The loss on Styrenics widened to USD 45m from USD 5m in 2007.

Altogether, the company reported a consolidated loss of USD 48m, after a profit of USD 347m in 2007. Depreciation, restructuring charges and similar one-off effects came to around USD 493m – see Plasteurope.com of 19.01.2009. Currency translation gains of USD 111m resulting from the switch to US dollar accounting for the Canadian operations were unable to compensate for these expenses.

Volume sales slipped from 391,000 t in Q3 2008 to 338,000 t in Q4. However, only October and November were weak. In December, demand surged to 156,000 t, the highest level ever recorded in the final month of the year.

e-Service:
Nova Chemicals’ fourth quarter and full-year earnings release as a PDF document (179 KB)