DSM’s (DSMN.AS) first-quarter earnings and sales below estimates on Tuesday due to low vitamin prices, poor volumes, and high inflation.
DSM and Firmenich released their final quarterly results separately before their merger on Monday.
The May 2022 merger becomes a key competitor in the fast-growing food ingredients and health goods industries, competing with IFF Inc (IFF.N), Givaudan (GIVN.S), and Symrise (SY1G.DE).
KBC analysts called the merged business “a global powerhouse with a well-balanced portfolio and solid growth prospects.”
DSM, which makes vitamins, food supplements, and specialized plastics for cars, clothing, and construction, reported a 24% drop in quarterly adjusted core earnings (EBITDA) to 278 million euros ($305.36 million), below the 280 million euros analysts expected in a Vara Research poll.
The firm anticipates the current quarter to be challenging before recovering in the second half.
“We anticipate a stronger second half of the year across all businesses as inflationary pressure eases, volumes recover, especially in China, and vitamin prices start to normalize,” DSM co-CEOs Geraldine Matchett and Dimitri de Vreeze stated.
DSM’s revenue decreased 6% to 1.89 billion euros, below analysts’ 2.04 billion euro expectation.
J.P. Morgan analysts claimed “customer destocking and the company’s preference of profitability over low-priced volumes” hurt volumes.
Firmenich reported third-quarter revenues of 1.23 billion Swiss francs ($1.37 billion), up 5.4% in constant currency, and adjusted EBITDA of 242 million francs, up 14.4%.
On Aug. 2, DSM will release half-year results and offer a full-year outlook for the DSM-Firmenich group.
DSM and DSM-Firmenich (DSFIR.AS) sank 2% in early trade.
Comment Template