UpdateStrong material sciences earnings buoy DSM Q3 profit rise

05 November 2013 11:40  [Source: ICIS news]

(updates with division information throughout)

LONDON (ICIS)--A strong rise in earnings for DSM’s material and life sciences divisions helped to drive a 33% year-on-year rise in core net profit for the third quarter of the year to €148m ($200m), the Netherlands-based firm said on Tuesday.

The company’s net sales increased by 4% year on year at €2.4bn in the third quarter, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 27% to €342m, the company said.

DSM’s performance materials and polymer intermediates divisions both posted improved results during the quarter, with EBITDA increasing 17% to €84m and 75% to €28m respectively.

“Our focus remains on the full integration of acquisitions and delivery of synergies, which together with continued success in our wide-ranging Profit Improvement Program will help improve DSM’s returns,” said DSM CEO Feike Sijbesma.

The increase in performance materials earnings was achieved in spite of static sales year on year during the quarter at €700m. Organic sales grew by 4%, with volumes increasing across all divisions, but prices decreased for resins and functional materials as a result of the weak European economy.

Prices were flat for high-strength fibre subsidiary Dyneema – which posted a double-digit year-on-year volume increase during the quarter – and DSM’s engineering plastics division.

Polymer intermediates strong EBITDA jump comes despite a 3% drop in sales to €374m, as higher volumes were offset by lower prices and currency effects. The 75% EBITDA increase was attributed in part to the impact of plant turnarounds in the US and China during the third quarter 2012.

The company’s key nutrition division posted a 20% increase in EBITDA during the quarter to €242m, while pharma division EBITDA tripled year on year to €12m, DSM added.

In January-September this year, the company’s net profit rose by 15% year on year to €433m, with EBITDA also up by 15% at €998m, it added.

Sijbesma added that economic headwinds had yet to die down, but affirmed that the company is expected to deliver stronger results for the full-year 2013 compared with 2012.

“Current trading conditions are similar to those experienced at the end of third quarter, while foreign exchange rates deteriorated,” he said.

“Nevertheless, we are firmly on track to deliver a significant increase in EBITDA for the full year,” he added.

($1 = €0.74)

Additional reporting by Nurluqman Suratman

By: Tom Brown
+44 208 652 3214

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