UpdateDSM's Q3 net profit more than doubles but share price falls

03 November 2009 12:05  [Source: ICIS news]

(Adds share price information and background)

DSM Headquarters, GeleenLONDON (ICIS news)--DSM's share price fell by 1.4% on Tuesday morning, despite the Dutch specialty chemical maker revealing that its third-quarter net profit came in above analysts' consensus as it more than doubled year on year.

The company’s shares were trading at €30.12 ($44.29) on the Euronext at 11:37 local time. CreditSuisse said the company had beaten consensus forecasts of net profit by 21%.

However, management continued to warn that the outlook for the fourth quarter remained unclear.

DSM's CFO, Rolf-Dieter Schwalb, told a press conference that the company expected a fragile and slow recovery.

The company’s outlook was reliant on the when the economy recovered, but the fourth-quarter results would be up on the same period of 2008, he added.

Earlier, DSM announced that it more than doubled its third-quarter net profit year on year to €374m ($550m), mainly due to the sale of Energie Holding.

As a result of the transaction, the company made a net book profit of €274m.

However, net profit before exceptional items for the three months ending 30 September fell 45% from the same period last year to €100m, while net sales fell 14% to €2.1bn.

The company’s nutrition division and polymer intermediates division saw an improvement in earnings before interest and tax (EBIT) in the third quarter compared with the same period last year – the nutrition division’s was up 14% to €119m, while the polymer intermediates saw an 11% increase

DSM managing board chairman Feike Sijbesma said there was ongoing resilience in the nutrition sector and the company had seen further improvement in its materials sciences division compared with previous quarters.

“Our early action to reduce costs, our focus on cash and our commitment to innovation and China are paying off,” he added.

DSM said that following restructuring programmes that began in the third quarter of 2008, the company’s workforce had decreased overall by 1,147 people and now stood at 22,905.

“We are alert that the economic climate remains uncertain and that the path of recovery is likely to prove uneven. However, it seems that the first half of 2009 represented the low point for this recession and we are showing that we are well placed to capitalise as markets improve, which is also reflected in a strong sales volume development,” Sijbesma said.

“Our robust financial strength allows us to capture market opportunities as they arise,” he added.

($1 = €0.68)

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By: Lucy Craymer
+44 20 8652 3214

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