UPDATE 1-Umicore sees tough year-end after Q3 slowdown

Tue Oct 23, 2012 4:57am EDT

* Q3 revenue rises 2 pct, slowdown from H1 of 8 pct

* Recycling still buoyant, other sectors slipping

* Maintains operating profit forecast of 370-390 mln euros

* Shares drop 2 pct, among weakest in Europe (Adds details, background, shares)

BRUSSELS, Oct 23 (Reuters) - Belgium-based specialty materials group Umicore said conditions would be tough in all markets except recycling in the final three months of 2012 after growth slowed sharply in the third quarter.

The former miner, which now recovers precious metal from old computers and mobile phones and produces materials for rechargeable batteries, said revenues rose by 2 percent in the July-Sept period.

Revenue rose by 11 percent in the first quarter and by 8 percent in the first six months.

Umicore shares were down 2.2 percent at 39.18 euros at 0800 GMT, making them among the weakest in the FTSEurofirst 300 index of leading European stocks.

KBC Securities cut its recommendation for Umicore to hold from accumulate, saying the share price was close to its 41 euros target and that there were few potential boosts coming up.

Umicore said the slowdown in the global economy was more pronounced in the third quarter with a number of end-markets hit by lower demand and reduced visibility on customer orders.

The slowdown was felt most in performance materials, such as for building and tools, and in energy materials, except rechargeable batteries. In its catalysts division, revenues rose slightly, but started to feel the effects of lower demand in the European automotive sector.

However, recycling revenue rose 8 percent, mainly due to the health of precious metal refining. Umicore said supply of industrial residues and profitability should remain strong in the fourth quarter.

Recycling made up 56 percent of operating profit in the first half.

The company maintained its forecast that 2012 recurring operating profit would reach 370-390 million euros. Last year the figure was 416 million euros ($543.7 million). ($1 = 0.7651 euros) (Reporting By Philip Blenkinsop; Editing by Helen Massy-Beresford)