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Solvay beats second-quarter sales, profit estimates despite lower volumes

Solvay beats second-quarter sales, profit estimates despite lower volumes
FILE PHOTO: The logo of Belgian chemical group Solvay is seen at its headquarters in Brussels, Belgium, July 29, 2015. REUTERS/Francois Lenoir/File Photo -
Francois Lenoir(Reuters)
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(Reuters) – Belgian chemicals group Solvay <SOLB.BR> reported higher-than-expected second-quarter sales and earnings on Wednesday, saying higher prices helped offset a fall in volumes.

The maker of lithium derivatives for batteries blamed a significant decline in demand from automotive, electronics and oil and gas markets for a 2.2% drop in total volumes.

“Growth in aerospace, mining, agro and aroma Performance was offset by the headwinds in automotive, electronics and oil & gas” chief executive Ilham Kadri said in a statement.

Second-quarter earnings before interest, tax, depreciation, and amortization (EBITDA) fell 5.2% from a year earlier to 624 million euros, above a consensus provided by the company of 594 million euros (£544.7 million).

Solvay’s second-quarter revenue of 2.65 billion euros was also slightly above a consensus forecast of 2.62 billion euros and the company upheld its 2019 guidance for a flat to “modestly” down organic EBITDA.

In May, Solvay cut its outlook from an earlier forecast for modest core earnings growth, saying demand from the automotive, electronics and oil and gas sectors continued to suffer from a worsening global outlook.

Slowing global growth, in Europe and China in particular, and the risks related to a trade war between the United States and China are worsening the outlook for the global economy, with a significant impact on the manufacturing sector.

The aeronautics and automotive sectors represented 24% of sales in 2018, while 14% came from resources and environment, as well as 5% from electricals and electronics.

(Reporting by Silvia Recchimuzzi in Gdynia; Editing by Tomasz Janowski)

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