By Linda Pasquini and Marta Frackowiak
(Reuters) -Swiss specialty chemicals maker Clariant on Friday said it still expected the second half of 2023 to be stronger than the first, with higher revenue and profit driven by a strong catalysts order book, after second-quarter profit beat its forecast.
The comments come as European chemicals makers, including Clariant, have been slashing their annual outlooks over the last month on the back of muted end-market demand, ongoing customer destocking, and weak commodity chemical spreads.
The group’s core operating profit (EBITDA) from continuing operations declined 19% to 175 million Swiss francs ($201.47 million) in the quarter, above Clariant’s own guidance range of 155 million to 165 million Swiss francs.
The result was helped by price hikes in its catalysts business and higher-than-expected gains from the sale of its quats business, it said.
“The catalysts results ended up being a little bit better than we expected due to very, very strong shipments in the final days of June,” Clariant CFO Bill Collins said in a call.
Catalysts business sales, which were up 30% in local currency in the quarter, made up roughly 20% of the group’s revenue in the first half of the year.
The company confirmed its full-year forecast for sales and core profit, which it cut in early July.
“We have always basically said that it will be a year of two halves, where in the first half we would see weaker trading and in the second half we would see a pick-up,” which however is now weaker than previously expected, CEO Conrad Keijzer said.
He added he believed destocking was mostly through.
Clariant said it now needed to hold prices amid raw material price declines as it looked at improving margins despite lower volumes.
The comment comes after German chemicals giant BASF on Friday flagged lower prices and lower volume across all its businesses but its agriculture division.
It confirmed its 2025 ambition to deliver compound annual sales growth of 4-6% and an EBITDA margin of 19-21%.
($1 = 0.8686 Swiss francs)
(Reporting by Marta Frackowiak and Linda Pasquini; Editing by Kirsti Knolle and Christopher Cushing)
