NOVA Chemicals Corporation: Earnings In Expected Range.

Business Editors

PITTSBURGH--(BUSINESS WIRE)--July 25, 2001

NOVA Chemicals Corporation (NOVA Chemicals) (NYSE:NCX)(TSE:NCX) reported a loss before unusual items of $23 million ($0.27 per share loss diluted) for the second quarter of 2001. This compares to a loss of $10 million before unusual items ($0.12 per share loss diluted) in the first quarter of 2001 and earnings before unusual items of $96 million ($1.00 per share diluted) during the second quarter of 2000.

The second quarter of 2001 also included a $17 million unusual benefit related to the impact of legislated reductions in Canadian Provincial income tax rates. As a result of this gain, NOVA Chemicals reported a net loss after unusual items of $6 million ($0.07 per share loss diluted) for the quarter.

"Our Olefins/Polyolefins business remained profitable during this difficult period while our Styrenics business continued to suffer from its greater dependence on the manufacturing sector" said Jeff Lipton, NOVA Chemicals' President and Chief Executive Officer.

"During this recessionary trough, NOVA Chemicals is focused on the things we can control," continued Jeff Lipton. "We continue to drive down our fixed costs, improve our product and customer mix and take working capital out of both of our businesses."

In the second quarter, two financial institutions purchased the preferred shares of a NOVA Chemicals subsidiary from Huntsman Corporation. This new arrangement provides NOVA Chemicals with increased flexibility and control by effectively providing us with the right to repurchase these shares prior to any conversion into NOVA Chemicals common shares.

The Olefins/Polyolefins business reported $29 million of net income in the second quarter, up from first quarter net income of $10 million. Margins expanded slightly, as lower volumes were more than offset by slightly higher product prices and rapidly falling natural gas feedstock costs.

The Styrenics business reported a second quarter net loss of $51 million, compared to the first quarter net loss of $26 million. Second quarter demand for monomer and polymers was down compared to the first quarter as a result of ongoing economic weakness in North America and Europe. L...

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