(Reuters) – Swiss chemicals firm Ems Chemie said on Wednesday its nine-month sales fell due to weak demand in its main markets Europe and China, and a strong Swiss franc, which appreciated as a safe haven currency.
The company maintained its full-year guidance although it expects the weak market environment to persist in the fourth quarter.
WHY IT’S IMPORTANT
Ems Chemie generates about half of its sales in the automotive market and is a supplier of the world’s largest EV maker, China’s BYD. The company makes lightweight polymer car parts, which are especially useful in electric vehicles, which typically weigh more due to heavy batteries.
CONTEXT
European automakers are hit with a sway of problems ranging from high production costs and tepid demand at home to challenges presented by vehicle electrification and competition from China, where consumers cut on spending due to a weaker economy. Ems Chemie makes most of its sales in Germany and China
KEY QUOTES
“In China, the recently announced economic stimulus package will probably only have a positive effect and boost confidence in the medium term,” the company said in a statement.
“In Europe, no signs of structural political improvements or confidence are noticeable”.
“In the USA general disillusion may follow the presidential elections”.
BY THE NUMBERS
Sales fell by 6.3% to 1.59 billion Swiss francs ($1.83 billion) in January-September, a tad below LSEG’s consensus of 1.60 billion Swiss francs.
($1 = 0.8669 Swiss francs)
(Reporting by Andrey Sychev, editing by Kirsti Knolle)
