Clariant beats rising raw material, energy costs to post higher profit

By John Revill

ZURICH (Reuters) -Specialty chemicals maker Clariant posted on Thursday a higher profit for the second quarter, as it beat rising raw material, energy and transport costs with higher prices and sales volumes.

The increases also helped the Swiss company, whose products include chemicals for personal care goods, raise its sales by a better-than-expected 26%.

Rising energy and raw material prices have been a problem for industrial companies in recent months, on top of jammed supply chains, which have made it difficult for them to get hold of vital components like semiconductor chips.

Clariant said its raw material, energy, and logistics costs in the second quarter were 36% higher than a year earlier, a similar level to the 37% rise it saw in the first quarter.

The company, which also makes catalysts for chemical production and fuel processing, offset the rise with its own price increases, as well as cost savings and leverage from higher sales.

Chief Executive Conrad Keijzer told reporters the company had offset 100% of its increased costs during the second quarter.

"Throughout the first-half of 2022, we continued to generate a significant sales and profitability increase, driven by strong pricing and volume growth, fully compensating raw material, energy, and logistic cost inflation," he said.

Clariant's sales for the second quarter rose to 1.30 billion Swiss francs ($1.36 billion), beating forecasts for 1.22 billion francs in a company-gathered consensus of analyst forecasts.

Core operating profit (EBITDA) increased by a third to 216 million francs, slightly ahead of forecasts for 207 million francs. The margin improved to 16.6% from 15.8 % a year earlier.

For the first-half, the company's net profit more than doubled to 386 million Swiss francs, up from 157 million francs a year earlier.

Clairant added that it expects to generate continued strong sales growth during the third quarter in local currencies, and sees improvement in its profitability. For the full year 2022, Clariant forecast sales of around 5 billion francs.

($1 = 0.9589 Swiss francs)

(Reporting by John Revill; editing by Rachel More and Uttaresh.V)