2023-07-14 14:44:11
In terms of profitability, operating profit (Ebit) also fell by 13.5% to 280 million francs. The operating margin was 23.7%, down 1.5 percentage points.
If the turnover is almost in line with the forecasts of the analysts questioned by the agency AWP, the Ebit and the margin emerged somewhat above the expectations of the financial community.
“General restraint”
“The new contracts (…) failed to compensate for the general restraint of consumers and businesses, as well as the weakness of foreign currencies against the Swiss franc,” explained the company specializing in high performance polymers and specialty chemicals.
In its core business of polymers, Ems-Chemie managed to increase its revenues by 0.5% in local currencies, while the area of specialty chemicals suffered a significant decline of 21.3%.
At a press conference, the manager explained that the group had had to revise its prices somewhat downwards, after having raised them in recent quarters in the face of soaring raw material prices. At the same time, sales volumes have declined.
Faced with a global economic slowdown and negative currency effects, the group now expects to see its net sales and Ebit decline over the full year, without further details. Inflation, which is still high, and the rise in interest rates are “sustainably” curbing consumption in Europe and the United States. China should not see its activity rebound quickly.
At the end of April, Ems-Chemie had already had to lower its 2023 forecasts and was then aiming for net sales and Ebit “slightly lower” than those for 2022.
Hiring in China
For the Cantonal Bank of Zurich (ZKB), the lowering of the outlook by the management of Ems-Chemie should result in a decline of more than 10% in results. The automotive sector, which represents around 62% of the group’s revenue, should continue to weaken, warned the cantonal establishment. Estimates confirmed in broad outline by the boss of Ems-Chemie.
The decline in the first six months of 2023 is not a surprise in view of the difficult market conditions, for their part underlined the experts of Vontobel, adding that a cyclical recovery was not in sight. Although the management manages the group in a “prudent” way and its special products are less affected by the economic slump, Ems-Chemie “cannot escape” the unfavorable macroeconomic situation, they estimated.
Despite these difficulties, Ems-Chemie does not want to resort to partial unemployment. The group wishes, on the contrary, to strengthen its workforce in China to respond to the production of electric vehicles.
These announcements did not seem to reassure investors. On the Swiss Stock Exchange, the Ems-Chemie title dropped 1.2% to 683 francs, against the tide of a broader SPI index up 0.41% around 11:10 a.m.
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