Clariant reports quarterly profit miss as Iran war hits demand, drives up costs
Clariant's Financial Performance Impacted by Middle East Conflict
By Marta Frackowiak
May 8 (Reuters) - Swiss speciality chemicals maker Clariant reported a lower-than-expected core profit for the first quarter on Friday, as the Iran war impacted demand for its catalysts and drove up production costs.
Shares of the company, whose chemicals are used in production of smartphones and electric vehicles, fell 3% in early trading.
Quarterly Earnings Overview
Adjusted for exceptional items, earnings before interest, taxes, depreciation and amortisation fell 16% to 160.2 million Swiss francs ($205.4 million), slightly below analysts' forecast of 162 million francs in a poll provided on Clariant's website.
CEO Statement on Market Conditions
"The Middle East conflict is mainly impacting our Catalysts customers in the Middle East and Asia, with sales now expected to be below the prior year," CEO Conrad Keijzer said in a press release.
Clariant stood by its full-year guidance, but said the war was causing elevated uncertainty and volatility.
Impact of the Iran War on the Chemicals Sector
Oil Prices and Market Disruption
YEAR-LONG WAR COULD DRIVE OIL TO $150-$200 PER BARREL
The U.S.-Israeli war with Iran has disrupted fuel and feedstock markets, pushing up costs for the energy-intensive chemicals sector, widely seen to be among those most exposed to the conflict.
The Middle East is also a highly profitable market for Clariant, Keijzer told reporters.
Strait of Hormuz and Recovery Prospects
The company's base-case scenario assumes the Strait of Hormuz will reopen no later than the end of June, which would support recovery in the catalysts business in the second half of 2026, he said.
However, a prolonged closure, lasting through the rest of the year, could drive oil prices as high as $150 or even $200 per barrel, Keijzer warned.
Cost-Cutting Measures and Tariff Recovery
To offset rising raw material and energy costs, Clariant has implemented value-based pricing while continuing to cut costs. Key measures under its cost-cutting plan contributed 9 million francs in savings in the first quarter.
It also expects to recover roughly 15 million francs paid in U.S. tariffs by the end of 2026, Keijzer said, after the U.S. Supreme Court ruled some of President Donald Trump's levies illegal.
($1 = 0.7798 Swiss francs)
(Reporting by Marta Frąckowiak in Gdansk; Editing by Milla Nissi-Prussak)
