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Dutch chemicals group DSM cuts profit target as costs soar

by Staff GBAF Publications Ltd
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By Tristan Chabba

(Reuters) -Dutch specialty chemicals maker DSM on Tuesday lowered its 2022 outlook after it saw energy and raw material cost inflation accelerate in Europe in the third quarter.

The group, which makes products from vitamins and food supplements to specialised plastics used in cars, clothing and construction, expects its adjusted core earnings (EBITDA) from continuing operations to grow at a low-single-digit percentage rate, against high-single-digits it had guided for earlier.

“We continue to counter rising energy and raw material prices, which accelerated especially in Europe, albeit with a time lag,” co-CEOs Geraldine Matchett and Dimitri de Vreeze said in a statement.

DSM said it expected the widening gap between costs and prices to impact its fourth-quarter earnings.

It also cited its targeted focus on driving working capital and cashflow for the outlook cut.

The company, based in the southern Dutch town of Heerlen, reported 3% growth in third-quarter adjusted EBITDA to 356 million euros ($353 million) from continuing operations, against a consensus estimate of 359 million euros.

It posted quarterly sales of 2.18 billion euros, slightly above the 2.10 billion euros expected by analysts.

($1 = 1.0077 euros)

(Reporting by Tristan Chabba in Gdansk; editing by Milla Nissi)