07 November 2006 11:23 [Source: ICIS news]
LONDON (ICIS news)--UBS on Tuesday kept Clariant’s rating and share price target unchanged but said the company’s lower full year expectations would be negative for the market. ?xml:namespace>
The analysts said in a note to clients that the Swiss specialty chemicals company had lowered its full-year earnings before interest and tax (EBIT) guidance to SF575m ($459/€360) from SF595m, despite removing its SF20m EBIT loss making customs manufacturing business.
Full-year EBIT consensus was even lower at SF556m, including the customs manufacturing unit, UBS said.
“While customs manufacturing is to be sold, an impairment charge of SF79m was taken plus another SF100m goodwill impairment for leather,” the analysts said.
They added that there was still not sufficient visibility to be confident on Clariant, with risks including raw material exposure, inexistent pricing power and a 5.7% post-tax return on capital employed (ROCE) below capital cost.
UBS said Clariant’s rating was still Reduce 2, while the target share price was unchanged at SF15.
The analysts said Q3 sales of SF2.01bn were in line with UBS expectation and earnings before interest, tax, depreciation and amortisation (EBITDA) at SF230m were above its SF195m forecast.
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