By Dimitri Rhodes
(Reuters) – Belgian chemicals group Solvay said on Wednesday it expected its 2024 core profit decline to be closer to 10%, at the positive end of its earlier guidance range, as its cost cutting measures yield results faster than anticipated.
Solvay has been cutting costs due to soft demand and a volatile macroeconomic and geopolitical environment, aiming to save 300 million euros by 2028.
Most recently, it said it planned to close its Salindres site in France in 2025, which would lead to a loss of 68 jobs.
“While we still expect to reach 150 million euros ($161 million) savings by the end of 2025 … we will end up 2024 above our 80 million euros objective that we announced earlier last quarter,” CEO Philippe Kehren told journalists in a call.
Solvay, which spun off speciality chemicals firm Syensqo last year, had previously guided for a 10% to 15% decline in annual underlying earnings before interest, taxes, depreciation and amortisation (EBITDA).
It reported underlying EBITDA of 259 million euros for the third quarter, little changed from last year and ahead of analysts’ forecast of 250 million euros in a Vara consensus.
However, it said negative pricing trends and soft demand would persist into the fourth quarter, coupled with potential seasonality effects towards the end of the year.
“All in all, if we look at our main essential products, what we see is stability,” Kehren said.
“That’s why we’re saying we will continue to focus on what we control; our cost, our cash discipline, and prepare ourselves to be ready when the market recovers,” he added.
($1 = 0.9315 euros)
(Reporting by Dimitri Rhodes in Gdansk; editing by Milla Nissi)
