UpdateClariant still on track for 2012 forecasts despite weak start

03 May 2012 13:08  [Source: ICIS news]

(updates throughout with comments from CFO and CEO)

Clariant headquartersLONDON (ICIS)--Clariant is still on track to reach full-year 2012 financial expectations through growth in the emerging markets, despite a sharp year on year drop in first-quarter net profits, the Switzerland-based specialty chemicals producer said on Thursday.

Earlier on Thursday, Clariant reported a decline of 83% in its first-quarter 2012 net profit to Swiss francs (Swfr) 20m ($22m, €17m), as weaker margins offset higher sales. Its net profit was Swfr120m in the same period last year.

CFO Patrick Jany said: “If you look at the operating margins we are where we want to be, and totally in line with our guidance after a rather soft start in 2012.

“On the net profit side, the previous year was extremely high and was the highest first quarter in ten years, and the best quarter in 2011. Since then it has deteriorated from that phase of the year.”

Looking across the company’s target regions, Jany said Clariant expected zero growth in Europe, but will continue to see the emerging markets strengthen its performance.

“It doesn’t really matter if there is a little contraction or little expansion of the GDP, we know our sales in Europe will be down,” he said.

“We are growing more in the US than we thought, and Latin America, India and China are growing within our expectations – we still expect full year growth of 45% in emerging markets,” he added

The CFO said it may not be the best year from a GDP point of view, but it should be good enough for the company to meet expectations for the year.

However, due to slightly lower GDP in some Asian countries growth will be a little less than previously anticipated, Jany added.

“We will see a bit of a lower growth in those areas but we are still talking about 4 or 5 or 6% growth depending on the country – that is significant growth, particularly when you see standard of living increasing,” he said.

Sales for January–March 2012 increased by 13% to Swfr1.95bn from Swfr1.72bn in the previous corresponding period, the company said in a statement.

Its earnings before interest and tax (EBIT) for the quarter fell by 39% year on year to Swfr123m, with EBIT margins before exceptional items slipping to 8% from 13% in the same period last year, Clariant said.

Clariant said it is expecting its first-half financial results to be lower year on year, with an improvement in the second half of 2012.

CEO Hariolf Kottmann said: “Going forward, we anticipate a gradual improvement in business conditions throughout the remainder of the year, which combined with further efficiency gains will lead to an improved performance in the second half-year.”

The company said it incurred Swfr41m in restructuring and impairment costs in the first quarter of 2012 that were mainly related to the integration of Germany-based specialty and catalysts firm Süd-Chemie and additional projects related with sustainable cost reductions.

Additional reporting by Pearl Bantillo

($1 = Swfr0.91, $1 = €0.76)


By: Leigh Stringer
+44 208 652 3214



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