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UPDATE 1-Dutch firm DSM reports better-than-expected rise in Q3 profit
November 2, 2017 / 6:42 AM / 16 days ago

UPDATE 1-Dutch firm DSM reports better-than-expected rise in Q3 profit

(Adds company comment, further earnings details)

AMSTERDAM, Nov 2 (Reuters) - Dutch speciality chemicals company DSM on Thursday said higher sales and tighter cost controls helped third-quarter core profit rise 13 percent, to 365 million euros ($425.3 million).

Analysts polled by Reuters on average expected adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of 352 million euros. Sales of 2.1 billion euros were in line with expectations.

“These results demonstrate significantly improved operational and financial performance, well ahead of plan, with all businesses delivering on their ambitious growth initiative,” Chief Executive Feike Sijbesma said in a statement.

DSM’s products range from food ingredients, such as vitamins and enzymes, to fibres and plastics used in cars, clothes and construction. Both the nutritional and the materials divisions realised higher sales in the third quarter.

Growth was exceptionally strong in animal nutrition, DSM said, with expansion in all regions. This was helped by a rapid recovery in the beef sector of Brazil, where a meat scandal put a brake on DSM’s growth over the past year.

Sales of human nutrition were boosted by strong demand for baby food products in China, while all parts of the materials division continued the strong growth shown in the first half of 2017.

In August DSM said it expects a double-digit growth of EBITDA this year, with an increase of return on capital employed (ROCE) by more than 100 basis points. In the first nine months of 2017 this profitability ratio improved from 10.6 to 12.3 percent. ($1 = 0.8582 euros) (Reporting by Bart Meijer; Editing by Amrutha Gayathri)

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