* 2012 recurring op profit 372 mln euros, matching f'casts
* Sees lower recurring operating profit in 2013
* Expects reduced contribution from recycling
* No improvement of conditions from second half 2012
* Shares hit six-month low
(Updates with CEO comment, adds shares, analyst comment)
By Philip Blenkinsop
BRUSSELS, Feb 7 Belgian speciality materials
group Umicore forecast a further decline in operating
profit this year, warning of a squeeze in its recycling business
and no marked improvement in other activities.
Its shares dropped to their lowest level in six months.
The recycling business, including recovery of precious
metals from old computers and mobile phones, delivered 28
percent of Umicore's sales and 61 percent of operating earnings
in the past year and was the only business not to suffer a
decline in profit in the second half.
But Chief Executive Marc Grynberg said the company did not
expect the same profitability this year in its recycling
operations, due to lower speciality metal prices, higher R&D and
investment costs and the planned shutdown for upgrades of its
Hoboken plant in Belgium.
Demand remained strong for ingredients used in rechargeable
batteries, due to surging smartphone and tablet sales, but
Grynberg also said Umicore saw no sign of any upturn in most
other activities due to the economic malaise afflicting much of
"We do not see the signs of a major change, that there would
be an upturn of the economy," Grynberg told a news conference.
Umicore shares dropped by as much as 6.4 percent to a
six-month low of 36.20 euros, making them among the weakest
performers in the FTSEurofirst 300 index of leading
The company said the economic slowdown had depressed
margins, particularly in energy materials, which had been hit by
the collapse of the solar market, and in its diverse
"performance materials" business, whose products range from zinc
roofing to platinum used in high-end glass.
The company forecast a drop in operating profit before
one-offs from last year's 372 million euros ($503.6 million),
itself down 11 percent from the year but in line with
That projection jolted the market, since for the current
year analysts had on average been expecting a rise of between 7
and 8 percent, according to a Thomson Reuters I/B/E/S survey.
"Clearly this was a nasty surprise," said KBC Securities.
Grynberg said depreciation, related to R&D and investments,
explained three-quarters of the decline in last year's operating
profit and was set to rise this year too. However, he also said
markets were weak.
Umicore said it had taken 47 million euros in charges and
provisions related to measures to cut costs and jobs, mainly
related to the weaker solar energy market.
In catalysts, one of Umicore's four divisions, Umicore said
U.S. and Asian auto markets were still performing well. However,
its margins were not as high as in Europe, where there is
greater demand for diesel cars, which require more expensive
In the longer term, Umicore is aiming for annual
double-digit percentage growth of its catalyst, recycling and
energy materials businesses through the five to 10 years from
2010, with performance materials moving in line with economic
($1 = 0.7387 euros)
(Editing by David Holmes)