Specialty chemicals producer Clariant has posted solid sales and underlying profitability for the first nine months of 2019. Continuing operations EBITDA, however, took a hit from a one-off provision of CHF 231 million (US$232m) as a result of further developments in an on-going competition law investigation by the European Commission into the ethylene purchasing market.
Sales were CHF 3.272 billion ($3.29bn), compared with CHF 3.278bn ($3.30bn) in the corresponding period in 2018, which corresponds to an organic growth of 3 per cent in local currency and a stable development in Swiss francs. Both higher volumes and pricing contributed to this expansion.
“Our nine months results reflect the resilience and quality of our continuing businesses, in particular in light of the worsening economic environment in the third quarter,” said Hariolf Kottmann, executive chairman of Clariant. “Looking forward, we will continually improve our performance through further operational improvement initiatives and the systematic implementation of our portfolio strategy to focus on higher value specialty businesses.”
For the first nine months, most regions contributed to the sales growth in local currency. Sales in Latin America and the Middle East & Africa both grew by 11 per cent. In Asia, the sales growth was a good 4 per cent despite a 9 per cent decrease in China. Sales in Europe grew by 2 per cent while North America reported a contraction of 4 per cent.
Sales in ‘discontinued operations’ (Masterbatches and Pigments) declined by 2 per cent on the back of a weakened economic environment. Clariant confirmed in July that it is pursuing the divestment of the Pigments and Masterbatches business units by the end of 2020.
Clariant expects higher profitability and stronger cash generation going forward, based on its focused, high-value specialty portfolio.