Corrected: Dutch DSM Q2 net profit shrinks 90%, sales flat

07 August 2012 06:55  [Source: ICIS news]

Correction: In the ICIS news story headlined "Dutch DSM Q2 net profit shrinks 90%, sales flat" dated 07 August 2012, please read in the first paragraph ... €41m ... instead of ... €230,000 .... A corrected story follows.

SINGAPORE (ICIS)--DSM’s second-quarter net profit slumped 90% year on year to €41m ($51m), citing adverse conditions in its polymer intermediates segment, the Dutch specialty chemicals maker said on Tuesday.

Overall sales barely grew at €2.27bn in the second quarter compared with the same period last year, the company said in a statement.

“The combined effect of the weakness in caprolactam on DSM Fiber Intermediates and DSM Engineering Plastics in the second quarter amounted to €70m,” it said.

Earnings before interest, tax, depreciation and amortisation (EBITDA) for the three months ending June 2012 declined 14% year on year to €290m, while operating profit declined a steeper 29% to €168m, it said.

In the first half of 2012, DSM posted a net profit of €186m, down 67% year on year, with sales inching up 1% to €4.56bn.

EBITDA for January-June this year was down 10% to €596m, with operating profit falling 22% to €368m, DSM said.

The global economic outlook in the second half of the year is “more uncertain”, said DSM chairman and CEO Feike Sijbesma in the statement.

“Because of the increased economic uncertainty, we are announcing today a profit improvement program that includes structural cost reduction and other initiatives that will generate €150m EBITDA benefits by 2014,” Sijbesma said.

DSM said it does not expect significant improvement in market conditions for polymer intermediates for the rest of the year.

“The results will be further impacted as a consequence of turnaround shutdowns of the caprolactam plants in China and North America in the second half of the year,” it said.

DSM said it expects EBITDA “to be clearly below the exceptional result in 2011”.

($1 = €0.81)

By: Pearl Bantillo
+65 6780 4359

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