19 January 2009 11:44 [Source: ICIS news]
LONDON (ICIS news)--Citigroup has cut earnings estimates for several European specialty chemicals companies amid “unprecedented de-stocking” in the sector, the bank said on Monday.
Citigroup cut its 2009 earnings per share (EPS) forecast for French producer Arkema to €0.94 from €2.50 ($3.33), noting that all of its businesses are sensitive to the downturn.
“This is a far more aggressive profit reduction than the company appears to be planning for, but we think it is a distinct possibility and certainly would not sustain the current dividend,” said Citigroup in a note to investors.
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Commenting on the wider European chemicals market, the bank said the first half of of 2009 would be about managing destocking and maximising cash generation.
“By the end of 2009, market share wars are likely to have begun due to expected weak demand. This should test business models,” Citigroup added.
($1 = €0.75)
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