Cognis Q1 results up on detergent ingredient demand

* Q1 adj EBITDA up 80 pct to 131 mln eur

* Q1 net income 47 mln after net loss a yr earlier

* Boosts capacity use as demand picks up

FRANKFURT, April 26 (BestGrowthStock) – Cognis [COGNS.UL], the
German chemicals maker sources have said is up for sale, posted
higher first-quarter earnings as stronger demand for additives
for cosmetics and detergents lifted capacity use.

Cognis, whose main chemicals are used in household products,
has not been hit as hard by the crisis as peers that target
industrial markets.

Earnings before interest, taxes, depreciation and
amortisation (EBITDA), adjusted for special items, jumped 80
percent to 131 million euros ($176 million), the former unit of
Henkel (HNKG_p.DE: ) said on Monday, citing preliminary figures.

Expenses at Cognis — as is typical of the capital intensive
chemicals industry — are dominated by fixed overhead costs. As
a result, even a modest rebound in sales translates into a jump
in earnings.

Net profit reached 47 million euros, up from a net loss of
33 million a year earlier, as sales rose more than 10 percent.

“We expect to further improve our business performance in
2010,” Chief Executive Antonio Trius said.

The company is hobbled by about 1.9 billion euros in net
debt and negative equity at the end of last year, with
liabilities exceeding assets by 762 million euros.

First-quarter cash flow after expenses on investments fell
to 40 million euros from 57 million a year earlier as the pickup
in demand lead the company to spend more on stockpiling.

Cognis’s owners Permira [PERM.UL] and Goldman Sachs Capital
Partners (GS.N: ) have launched a campaign to sell the company
outright even as it prepares to go public, sources have said.

U.S specialty chemicals maker Lubrizol (LZ.N: ) has joined
other potential bidders in a deal that could value the target at
around 3 billion euros, a source close to the matter told
Reuters this month. [ID:nLDE63D0IR]

The owners of Cognis are also in sale talks with several
parties, including German chemicals group BASF (BASF.DE: ), other
people close to the negotiations have told Reuters

Analysts view Belgium’s Solvay (SOLB.BR: ) and Dutch group DSM
(DSMLX.O: ) as potential bidders as well.

Stock Market Analysis

($1=.7439 Euro)
(Reporting by Ludwig Burger; editing by Karen Foster)

Cognis Q1 results up on detergent ingredient demand