COURTAULDS: TENCEL NOW PROFITABLE
Byline: James Fallon
LONDON — Tencel is starting to pay off for Courtaulds PLC.
The firm said Wednesday a move into profit for its Tencel fiber business and a slight turnaround at its acrylics operations contributed to a 12.5 percent hike in operating income at its fibers and chemicals division in the first half ended Sept. 30.
Operating profit for the division came to $45.2 million (27 million pounds), while sales were almost flat at $732.4 million (437 million pounds). A year earlier, operating profits were 24 million pounds on sales of 439 million pounds.
The improvement came despite continued weakness in the group’s viscose operations in the U.S. and Europe and softer demand for acetate yarns.Tencel, the cellulosic fiber Courtaulds began producing in 1992, moved into the black in the first half, and the firm continues to be optimistic about long-term prospects. Gordon Campbell, Courtaulds chief executive, declined to break out profits and sales, but said, “The profit we made on Tencel would have been quite satisfactory for most fiber companies. It is significant with Tencel, because we still are investing a disproportionate amount on marketing and development.”
Overall, Courtaulds reported a 10 percent drop in after-tax profits to $80.3 million (47.9 million pounds) on a 2.4 percent rise in sales of continuing operations to $1.78 billion (1.06 billion pounds) in the first half. The profit drop reflected costs in disposing of discontinued operations, including some polymer products units.