Hercules Paper Technologies announce first-half results - sales up, profit down

Hercules has announced their 2nd quarter 2008 results (click here). For the paper group, the following was reported:

In the Paper Technologies and Ventures Group, net sales in the second quarter increased 8% while profit from ongoing operations decreased 2% compared with the same quarter in 2007.

Paper Technologies sales increased 3% due to 7% favorable rates of exchange and 2% increased prices, partially offset by 6% lower volume. Product mix was flat in the aggregate. Volumes were lower in both North America and Europe while Asia volume was flat as compared to the second quarter of last year. North American volumes reflected lower sales of sizing products. European volumes reflected lower sales of strength chemicals. Price increases were achieved in the Americas and Europe while Asia pricing was lower in the aggregate. The favorable rates of exchange primarily reflect the strong Euro. Sales in fast growing markets, including Brazil, Chile, Indonesia, Russia and the Middle East, were up 26% compared to the prior year. Sales of new products continued to drive growth in overall sales and profitability.

The dollar-based companies, such as Hercules, with extensive overseas operations are benefiting from exchange-rate gains (low US dollar). It will be interesting to now see how Ashland integrate the successful Hercules paper business.