UPDATE 1-Kemira cuts outlook after missing Q2 expectations

Tue Jul 22, 2014 8:44am EDT

Related Topics

* Q2 adjusted EBIT 37 mln euros vs 44 mln in Reuters poll

* Trims outlook for the full-year

* Shares fall 5.2 pct (Adds analyst comment, updates shares)

HELSINKI, July 22 (Reuters) - Finnish chemicals company Kemira revised its full-year earnings outlook on Tuesday after a surprise profit fall in the second quarter, citing pricing pressure and unfavourable foreign exchange rates.

Kemira said it now expects 2014 adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) to be around the year-ago level of 251.9 million euros. It had earlier forecast a rise to its adjusted operating profit (EBIT).

"There's no way around it, this is a clear profit warning. EBIT will not rise either," said Pohjola analyst Antti Saari.

Kemira posted an adjusted operating profit of 37 million euros ($50 million) in the second quarter, down from 40 million euros a year earlier and missing analysts' average forecast of 44 million.

Kemira appointed Jari Rosendal as new CEO in May after Wolfgang Buechele, who pushed through a cost-cutting and restructuring scheme, moved to Germany's Linde.

Kemira earlier this month announced it would buy rival Akzo Nobel's paper chemical business for 153 million euros, and analysts say Rosendal should seek more deals to tap to new growth while keeping costs in check.

The company aims to make 15 percent of EBITDA per sales by 2016. In the second quarter, at 11.6 percent, the EBITDA margin was well below that.

"Their competitiveness and pricing power doesn't look too strong... I believe the company must find quite a lot savings to achieve the target, which will be a challenge for the new management," Saari said.

Shares in the firm fell 5.2 percent to 11.38 euros by 1229 GMT. ($1 = 0.7415 Euros) (Reporting By Jussi Rosendahl; Editing By Sakari Suoninen and Sophie Walker)

FILED UNDER: