Dutch DSM Q1 net profit rises 28%, helped by Martek acquisition

27 April 2011 11:55  [Source: ICIS news]

(adds segment earnings and further quotes from CEO throughout)

LONDON (ICIS)--DSM’s first-quarter net profit jumped 28% year on year to €166m ($244m), with the acquisition of US nutritional supplements company Martek Biosciences in February contributing to earnings, the Netherlands-based specialty chemicals producer said on Wednesday.

Net sales for the quarter increased 5% year on year to €2.35bn, as Maryland-headquartered Martek Biosciences added €37m to sales in its nutrition business, DSM said.

“In the quarter we successfully completed our acquisition of Martek, welcoming its employees to DSM. The integration of Martek started immediately and the contribution to our profit is in line with expectations,” Feike Sijbesma, DSM chairman and CEO, said.

DSM’s earnings before interest, tax, depreciation and amortisation (EBITDA) rose 4% to €348m, the company said.

Sijbesma put the improvement down to the company’s focus on innovation and its global customer base, plus DSM’s “excellent market positions and presence in high-growth economies”.

The company added that it benefited from improved business conditions in most end-markets and geographic areas, especially high-growth economies such as China, resulting in a significant improvement in operating profit.

DSM’s polymer intermediates segment almost doubled its first-quarter EBITDA to €99m, against €50m profit in the same period last year, reflecting strong demand and an increase in selling prices, it said.

The company’s performance materials segment posted a first-quarter EBITDA of €91m, up 28% compared with first quarter 2010, on the back of growing sales and an increase in selling prices, which offset raw material prices.

DSM’s nutrition cluster continued to show healthy volume growth at price levels, although the pharmaceutical segment faced a drop in sales volumes, it added.

Looking ahead, DSM said 2011 would be a strong year for the company and it expected to meet an EBITDA target of €1.4bn–1.6bn in 2013.

“Our robust performance [in first quarter 2011] represents further progress towards our 2013 targets as we continue to successfully execute our strategy,” Sijbesma said.

“Our business outlook for the rest of the year is positive and we expect 2011 to be a strong year for DSM,” he added.

Additional reporting by Pearl Bantillo

($1 = €0.68)

For more on DSM, visit ICIS company intelligence

By: Franco Capaldo
+44 (0)20 8652 3214

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