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Kraton Increases Global Prices for Selective Product Line

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Kraton Corporation has announced a global price increase for Rosin Ester, Terpene and AMS/AMS Phenolic Products effective Jul 1. The company is a leading producer of styrenic block copolymers, specialty polymers and high-value performance products derived from renewable resources.

The company declared a price increase of $50--$100/MT for Aquatac, Sylvalite and Sylvatac and Sylvacote Rosin Ester product lines. Sylvares and Zonatac Terpene and AMS/AMS phenolic specialty product lines will witness an increase from $200--$500/MT. The price hike is in response to the changing conditions in the chemical industry that has been impacted by raw material price inflation.

Kraton’s polymer segment witnessed a significant increase in the cost of raw materials in the first quarter of 2017. The rise in the cost of raw materials had a negative impact on the company's margins. However, Kraton has implemented price hikes to address this raw material cost inflation and expects polymer margins to normalize in the second quarter, partly on further price realizations.

Kraton’s shares have rallied 18.8% over the past one year; outperforming the Zacks categorized Chemical-Specialty industry’s 5.4% gain.



Kraton’s adjusted loss of 15 cents per share for first-quarter 2017 was narrower than the Zacks Consensus Estimate of a loss of 23 cents. The company recorded revenues of $458 million in the reported quarter, up around 9% year over year. Sales, however, missed the Zacks Consensus Estimate of $495 million.   

The company expects adjusted EBITDA for 2017 to be around $350 million. Kraton also anticipates to reduce net debt by $100–$150 million this year. The company believes that the second-quarter results will reflect a positive spread between ECRC and FIFO of roughly $10 million.

Kraton Corporation Price and Consensus

 

Kraton currently sports a Zacks Rank #1 (Strong Buy).

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