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Business

Chemicals maker Clariant cuts FY sales target, misses Q3 core profit view

Published by Uma Rajagopal

Posted on October 29, 2024

Featured image for article about Business

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)