DSM tops analyst forecasts in second quarter
quarter results today, as higher selling prices in its industrial
chemicals unit and lower fixed costs boosted margins, write
Dominique Patton and Phil Taylor.
Overall, operating profits at the group climbed 43 per cent to €217 million, beating analysts' expectations.
Sales growth of 9 per cent came from a combination of the newly acquired NeoResins business and an average 8 per cent increase in selling prices over the prior year's second quarter.
This countered a 1 per cent decline in volume growth, although some units reported higher demand including the animal nutrition business and food specialties, which makes probiotics and other ingredients.
DSM's Life Science division achieved a higher second quarter operating profit of €61 million, despite a slight decrease in sales from €387 million to €375 million. DSM Anti-Infectives' operating result improved due to restructuring measures and cost control, but was still slightly negative, said the firm. DSM Pharmaceutical Products and DSM Fine Chemicals both saw their profits improve.
Negative exchange rates were blamed for a slight decline in sales at DSM Nutritional Products, the world's biggest vitamin business, but it continues to improve margins. Operating profits at this unit were up 26 per cent as a result of increased sales to both animal nutrition and personal care, and the operating cost savings brought about by the Vital project.
In human nutrition and health however prices and volumes were 'fairly stable', said DSM.