Euro strength could hit Europe chems Q1 - Citi

15 April 2008 11:26  [Source: ICIS news]

LONDON (ICIS news)--The strength of the euro will be a negative factor for Europe’s largest chemical companies reporting first-quarter results next week but confident outlooks were still expected, Citigroup analysts said on Tuesday.

 

The bank said it expected Akzo Nobel to perform well on synergies from its recent acquisition of ICI.

 

It said weakening demand from the US was a problem but growth elsewhere should compensate, forecasting a 6% rise in adjusted earnings per share (EPS).

 

BASF was predicted to see a 7.5% rise in underlying operating profits, benefiting from a relatively low exposure to weak US construction and automotive markets. Its fourth-quarter operating profit was down 5.6% but was up 8.4% for the full year.

 

Citigroup said it expected BASF’s plastics and agrochemicals segments to perform strongly despite the strong euro and continuing cost challenges.

 

Bayer was expected to report 5% adjusted EPS growth on the back of a similar sales increase.

 

Citigroup said there was good cost saving across the group and an upturn in crop science. Negative factors included the weakness of the US dollar, rising raw material costs and a downturn in the polycarbonate cycle.

 

For more on Akzo Nobel, BASF and Bayer visit ICIS company intelligence

By: Mark Watts
+44 20 8652 3214

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