Business
Chemicals maker Clariant cuts FY sales target, misses Q3 core profit view
Global Banking & Finance Review®
Company
By Ozan Ergenay
(Reuters) -Swiss specialty chemicals maker Clariant cut its 2024 sales target on Tuesday and reported third-quarter core profit below expectations, weighed down by lower volumes in its catalysts business and restructuring charges.
The group’s earnings before interest, taxes, depreciation and amortisation fell 13% year-on-year to 139 million Swiss francs ($160.69 million) in the quarter, missing analysts’ average estimate of 150 million Swiss francs in a company-provided poll.
Clariant said it now expects a low-single-digit percent fall in local currency sales this year with an EBITDA margin of around 16%, having previously forecast full-year sales to be flat or to show up to low-single digit percentage growth.
Chemical companies have been under pressure for more than a year and have been prompted to reduce their inventories on lower demand from industrial clients as energy prices soared.
“We achieved growth in our Adsorbents & Additives and Care Chemicals businesses while maintaining pricing discipline in all businesses,” CEO Conrad Keijzer said in a statement.
However, lower-than-expected catalysts volumes impacted group sales, EBITDA margin, and our full-year sales outlook.
Clariant’s third-quarter sales dipped 1% in local currency terms to 991 million francs, below analysts’ forecast of 1.01 billion francs, according to a company-provided poll.
Third-quarter sales were slightly better than our estimates, but lower than consensus,” Vontobel analyst Sibylle Bischofberger said in a note, seeing the quarterly results as slightly negative.
Sales in the catalysts division, which provides catalytic products for the chemical industry, fell by 20% in local currency to 203 million Swiss francs.
Shares in the company were down 0.7% in Julius Baer pre-market trade as of 0720 GMT.
The Swiss company also reiterated its medium-term targets, expecting an EBITDA margin of 17%-18% and free cash flow conversion at the targeted level of around 40% for 2025.
($1 = 0.8650 Swiss francs)
(Reporting by Ozan Ergenay; Editing by Sherry Jacob-Phillips and Jan Harvey)
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company's overall financial performance and profitability.
Restructuring charges are costs associated with reorganizing a company's operations, which may include layoffs, facility closures, or other changes to improve efficiency.
A sales target is a specific goal set by a company for the amount of sales it aims to achieve within a certain period.
Core profit refers to the earnings generated from a company's primary business operations, excluding any non-operational income or expenses.
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