Solvay first-quarter profit in-line, passes Iran war costs on to customers
Solvay Navigates Conflict Impact and Maintains Profit Expectations
By Olivier Cherfan
Passing on Higher Costs Amid Sector Challenges
May 7 (Reuters) - Belgian chemicals group Solvay said on Thursday it was passing higher energy and transport costs on to customers as the Iran war hit the sector, joining peers seeking to cushion the impact of the conflict.
Assessing the Impact of Joint Venture Shutdown
Solvay said it is assessing how the temporary shutdown of its Saudi Arabia-based peroxides joint venture would affect its business in the second quarter, adding that the overall impact of the conflict remains limited.
First-Quarter Results and Market Expectations
The comments accompanied first-quarter results showing core profit fell 12.4% to 219 million euros ($257.37 million), broadly in line with Vara Research's consensus of 220 million euros.
Middle East Exposure and Production Halt
Solvay makes less than 5% of its sales in the Middle East but production at its 50-50 Saudi Hydrogen Peroxide joint venture with Sadara Chemical Company, itself a joint venture of Saudi Aramco and Dow, has been halted since mid-March.
"This impact on the second quarter is still being assessed and will depend on when the platform activity will resume," the company said.
Outlook for Restart and CEO Commentary
The site, which has a capacity of more than 300,000 metric tons a year, is expected to restart in the next few months, Solvay CEO Philippe Kehren told reporters after presenting results.
Market Reaction and Additional Information
Solvay shares fell 8.8% following the news to the bottom of France's SBF 120 index.
($1 = 0.8509 euros)
(Reporting by Olivier Cherfan in Gdansk, editing by Christoph Steitz and Louise Heavens)
