The US firm reported a 16% drop in fine chemicals revenue for the three months ended June 30 to $176m and a 25% fall in income to $46m, attributing the declines to “unfavorable sales volumes and pricing” and “pricing, lower factory operating rates and timing of custom services projects,” respectively.
Albemarle did not say whether its active pharmaceutical ingredient (API) or drug intermediates business played a role in the sales and earnings decline.
The fine chemical unit’s Q2 2013 performance is in marked contrast with the comparable quarter last year, in which rising demand for generic APIs – particularly its top seller ibuprofen – drove a 13% increase sales and a 17% leap in income.
The Q2 2012 increase in demand for APIs was a key driver for the US firm’s decision to increase capacity at its production facility in South Haven, Michigan.
At the time Albemarle said the number of custom API projects conducted at the site has doubled since 2010 and that the expansion will enable the company to advance its growing portfolio of custom API products.
Company spokeswoman Jennifer Vaccaro told in-pharmatechnologist.com the investment would allow Albemarle “to produce more of both our current line of generic APIs as well as give capacity for new custom products.”
In February, Albemarle announced plans to increase reactor capacity at a second facility – its plant Tyrone, Pennsylvania – also citing its pharma custom synthesis business as a driver.
Whether the South Haven or Tyrone facilities are on the list of plants that have experienced “lower factory operating rates” is unclear. Albemarle is due to hold its second quarter earnings call later today.
Overall net revenue for the period was down, falling 7% to $634m while income dropped to $129m from $179m in the year earlier quarter.