Evonik Cuts Outlook, To Step Up Cost Cuts
Germany's Evonik said it would step up cost cutting measures and slash its investment budget as it became the latest specialty chemicals maker to caution investors about its business prospects.
The company, which made its stock market debut on April 25, said it now saw 2013 sales at the year-earlier level and operating income down. It had previously forecast higher sales and flat operating earnings.
The maker of animal feed additives, acrylic glass and super-absorbents for diapers also slashed its budget for new plants and equipment this year by 300 million euros ($400 million) to 1.2 billion.
Even though it aims to stick to a scheme to invest 6 billion from 2012 to 2016, it said it may postpone some projects it has not started yet over the next few years.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) fell 23% to 489 million euros ($649 million) in the second quarter, slightly more than the average of 10 analyst estimates of 486 million posted on Evonik's website.
Bayer's MaterialScience unit, also a maker of transparent plastics, and Brussels-based chemicals firm Solvay cut their profit forecasts last month. BASF said reaching its full-year target had become more challenging.
Evonik, Germany's second-largest chemicals maker after BASF, is controlled by RAG, a public sector trust that will bear the liabilities of Germany's wound-down coal mines. Buyout firm CVC also holds a stake.
