Synthos with PLN 112 mln H1 profit drop due to impairment

WSE-listed chemicals group will suffer a PLN 112 million reduction in H1 net profits as a result on impairments to assets purchased from Ineos, Synthos said in a market filing. “Assumptions relating to both sales prices and negotiating power at the purchase side are not reflected in the results and are not sustainable in the long term,” Synhos said in a market filing. Synthos bought expandable polystyrene production operations from INEOS for €80 million, back in May last year. “In the analyzed period there was a significant volatility of styrene prices (basic raw material), which could not be reflected in the EPS prices sold by Styrenics West. To improve the competitiveness of this product group, full implementation of new solutions will require additional time and potential resources,” the company explained. In the longer term, the board also notes the risk of a drop in demand for EPS in the packaging segment for substitute materials and consequently the threat to maintaining margins and sales volumes or their growth in this segment is also reported.