Clariant tops Q2 profit forecast despite Mideast hit on catalysts unit (updated)
UPDATE 3-Clariant tops Q2 profit forecast despite Mideast hit on catalysts unit Adds share move in paragraph 1, peer guidance and analyst expectations in paragraph 6, CEO quotes in paragraph 7-8 and 10
By Marta Frackowiak and Cian Muenster
July 31 (Reuters) - Speciality chemicals maker Clariant CLN.S beat market expectations for second-quarter earnings on Friday, as strong results in other business areas cushioned an Iran war-driven impact on its Catalysts business.
The Swiss company's shares rose 1.6% by 0815 GMT, after its Care Chemicals and Adsorbents & Additives units showed good resilience in a challenging environment.
The trend of customers placing greater value on reliability over price continued in the quarter, especially for speciality chemicals which are often unique and tailored to specific customer requirements, CEO Conrad Keijzer said during a press call.
Clariant's adjusted earnings before interest, taxes, depreciation and amortisation rose 1.5% to 171.1 million Swiss francs ($212.0 million), beating analysts' forecast of 152 million francs provided by the company.
The company also expects the catalysts business to have a stronger second half of the year, as customers particularly outside the Middle East resume operations.
'DISPROPORTIONATE' MIDDLE EAST HIT
The company had said in May that the war in the Middle East, a highly profitable market for Clariant, was weighing on demand in the catalysts business and driving up production costs.
Heightened economic uncertainty has also eaten into customers' willingness to invest, weighing on demand across the globe.
"The challenge for us versus peers (is) that we are hit a bit disproportionately by the Middle East," Keijzer said.
Many European suppliers, including BASF BASFn.DE and Evonik EVKn.DE, have raised their annual forecasts, helped by improved pricing and resilient demand from local clients amid supply disruptions.
Clariant maintained margin and sales targets for 2026, while raising its cost-cutting goal.
It now aims for an annual savings run-rate of 100 million francs by 2027, instead of the previously announced 80 million. It expects to realise savings of 90 million francs by the end of 2026, after booking 24 million francs in second-quarter restructuring charges.
The company has shifted its focus from closing production sites to streamlining operations at existing facilities, particularly in European plants with high energy costs, Keijzer said.
($1 = 0.8071 Swiss francs)
(Reporting by Marta Frąckowiak and Cian Muenster in Gdansk; Editing by Milla Nissi-Prussak)