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Solvay
BRUSSELS (Dow Jones)--Belgian chemical and pharmaceutical company Solvay SA (SOLB.BT) Tuesday reported a smaller-than-forecast decline in first-quarter net profit and said its full-year operating result will be lower than in 2008.
Net profit in the quarter more than halved, to EUR91 million from EUR208 million in the same year-ago quarter, but the figure was higher than the EUR66.2 million net profit forecast by five analysts polled by Dow Jones Newswires. The lower bottom-line mainly reflected a negative performance of the group's plastics business.
"Thanks to the strong competitive positions of its industrial activities, the group is well-equipped to continue to cope with the global crisis," Solvay said in a statement. But it added: the "full-year operating result of the group will be lower than last year."
Recurring earnings before interest and taxes, or Rebit, stood at EUR142 million in the first quarter, down 53% on year. The company's Rebit stood at EUR965 million for 2008.
Sales fell 16% to EUR1.99 billion, with a sharp drop in the plastics business as the global economic crisis took its toll, together with a reduction in inventory, the company said.
At 1153 GMT, Solvay shares, which have lost 31% of their value over the past 12 months, were trading down 0.7% at EUR64.77 in line with a lower overall market.
Brussels-based Solvay has been hard hit by the current economic downturn as its activities are exposed to the vulnerable construction and automobile industries. The pharma unit has been able to offset part of the downward trend, increasing its weight in the company's core earnings.
Solvay said earlier this year it is analyzing various options for its pharma business. These range from doing nothing, to seeking new acquisitions of companies or products, to divesting the business or floating it on the stock exchange, as well as partnering with another company, Solvay's Chief Executive Christian Jourquin said during the company's annual general meeting Tuesday afternoon.
No decision has been taken at this stage, he added. "We are pursuing this review professionally and without haste, bearing in mind the long-term future of our group and those who compose it," Jourquin said.
Recent mergers and acquisitions in the industry have shown that major players are willing to pay high earnings multiples for acquisitions to keep their product pipeline healthy. But one obstacle to a sale could be the controlling stake held by descendants of the company's founder, Ernest Solvay.
BRUSSELS (Dow Jones)--Belgian chemical and pharmaceutical company Solvay SA (SOLB.BT) Tuesday reported a smaller-than-forecast decline in first-quarter net profit and said its full-year operating result will be lower than in 2008.
Net profit in the quarter more than halved, to EUR91 million from EUR208 million in the same year-ago quarter, but the figure was higher than the EUR66.2 million net profit forecast by five analysts polled by Dow Jones Newswires. The lower bottom-line mainly reflected a negative performance of the group's plastics business.
"Thanks to the strong competitive positions of its industrial activities, the group is well-equipped to continue to cope with the global crisis," Solvay said in a statement. But it added: the "full-year operating result of the group will be lower than last year."
Recurring earnings before interest and taxes, or Rebit, stood at EUR142 million in the first quarter, down 53% on year. The company's Rebit stood at EUR965 million for 2008.
Sales fell 16% to EUR1.99 billion, with a sharp drop in the plastics business as the global economic crisis took its toll, together with a reduction in inventory, the company said.
At 1153 GMT, Solvay shares, which have lost 31% of their value over the past 12 months, were trading down 0.7% at EUR64.77 in line with a lower overall market.
Brussels-based Solvay has been hard hit by the current economic downturn as its activities are exposed to the vulnerable construction and automobile industries. The pharma unit has been able to offset part of the downward trend, increasing its weight in the company's core earnings.
Solvay said earlier this year it is analyzing various options for its pharma business. These range from doing nothing, to seeking new acquisitions of companies or products, to divesting the business or floating it on the stock exchange, as well as partnering with another company, Solvay's Chief Executive Christian Jourquin said during the company's annual general meeting Tuesday afternoon.
No decision has been taken at this stage, he added. "We are pursuing this review professionally and without haste, bearing in mind the long-term future of our group and those who compose it," Jourquin said.
Recent mergers and acquisitions in the industry have shown that major players are willing to pay high earnings multiples for acquisitions to keep their product pipeline healthy. But one obstacle to a sale could be the controlling stake held by descendants of the company's founder, Ernest Solvay.
