Solvay sees lower 2023 earnings, but longer-term U.S. boost

By Marine Strauss

BRUSSELS (Reuters) - Belgian chemicals group Solvay on Thursday forecast lower earnings this year due to weaker demand from chemicals, coatings and consumer markets, sending its shares down more than 3% even as it reported record profits for 2022.

Despite the downbeat forecast, the company hailed the huge investments and incentives for a greener future included in the U.S. Inflation Reduction Act as a major long-term opportunity.

"Building that infrastructure is a big win and a big opportunity for Solvay and we love it because we are leaders in providing those sustainable solutions," Chief Executive Officer Ilham Kadri told Reuters.

The U.S. Inflation Reduction Act has ruffled feathers in Europe, which fears its huge subsidies could give the United States a competitive advantage.

Belgian Prime Minister Alexander De Croo said last month Washington had lobbied some Belgian companies to step up investments in the United States. However, Kadri said that had not been the case for Solvay.

The group, whose products include lithium derivatives for batteries, is in the midst of splitting into two listed companies, one focused on chemicals such as soda ash, peroxides and silica, and the other on materials, including polymers. Kadri said that was on track for completion in December 2023.

For 2023, Solvay said it saw underlying earnings before interest, tax, depreciation and amortisation (EBITDA) declining by 3% to 9% due in part to destocking and the cyclical nature of its business.

Its shares were down 3.1% at 0955 GMT, underperforming a stable Stoxx Europe 600 Chemicals index.

Solvay's underlying EBITDA for last year reached a record 3.29 billion euros ($3.49 billion), beating a company-provided consensus of 3.25 billion euros, helped by higher prices.

Fourth-quarter EBITDA jumped 28.6% to 736 million euros, also above a consensus of 703 million euros.

The Brussels-based company raised its dividend by 0.20 euro to 4.05 euros per share, subject to shareholder approval.

($1 = 0.9432 euros)

(Reporting by Marine Strauss, Editing by Sonali Paul and Mark Potter)