Streamlined Clariant Expects Higher Margins

Swiss specialty chemicals firm Clariant said on Thursday it expected its slimmed-down business to deliver higher margins and net income, with emerging markets providing most of the growth.

The company said it would raise its dividend by 10% to 0.33 Swiss francs per share, well ahead of expectations for 0.28 francs in a Reuters poll.

Clariant, which last year gave shareholders their first dividend in five years, sold three business units in 2012 and has earmarked a fourth for disposal.

It posted a 5% drop in 2012 total net income to 238 million Swiss francs ($258.9 million), as Europe's ailing economies squeezed margins in the group's cyclical businesses such as additives, which was hit by weakness in the electronics industry.

Total sales including discontinued businesses rose 5.5% from a year earlier, largely due to its acquisition in 2011 of Germany's Sud-Chemie.

In December it sold its textile chemicals, paper speciality chemicals and emulsions units to U.S. private equity firm SK Capital for 502 million Swiss francs as part of its effort to retreat from low-margin businesses.

Its leather services, detergents and intermediates businesses are also on the block.

At the end of January, Dow Chemical reported lower- than-expected profit on stumbling international demand for polyurethane and chlorine.

Larger German rivals Bayer and BASF will give more clues on the health of the industry when they report later in the month.