Versalis cuts quarterly loss 65% on restructuring moves

Milan, Italy – Eni's chemicals business Versalis reduced its second-quarter loss by 65% year-on-year as restructuring measures and plant closures began to improve earnings.

The chemical business reported a pro-forma adjusted loss of €65 million for the three months ended 30 June, compared with a loss of €184 million in the same period last year, Eni reported 29 July.

For the first half, the pro-forma adjusted loss narrowed to €223 million, almost 50% lower than the €427 million reported a year earlier.

Eni attributed the improved performance to "ongoing restructuring efforts and last year's plant closures," (ERJ report) as well as a temporary improvement in polyethylene margins caused by supply disruptions linked to the Middle East crisis.

The group cautioned, however, that "the overall picture of the chemical sector remains depressed."

This, it said, was due to rapidly rising oil-based feedstock and utility costs that could not be passed on through commodity plastics prices due to weak demand and competitive pressure from lower-cost producers.

According to Eni, polyethylene margins had already "returned to unprofitable territory" in July.

Last year, Versalis accelerated its restructuring programme by permanently shutting down steam crackers at Brindisi and Priolo, earlier than originally planned, as part of a wider effort to restore profitability. (ERJ reprot)

The sites are now undergoing restructuring, decommissioning and environmental remediation ahead of future redevelopment, Eni reported.