Solvay: analysts see strong 1Q 2007 results

Belgian chemicals and pharmaceuticals group Solvay SA is expected to post strong 1Q results on 8 May 2007, driven by good performance at its industrial businesses, according to analysts polled by Thom…

Belgian chemicals and pharmaceuticals group Solvay SA is expected to post strong 1Q results on 8 May 2007, driven by good performance at its industrial businesses, according to analysts polled by Thomson Financial News. REBIT (earnings before interest and taxation from ongoing operations) is forecast at EUR 285-303 million (EUR 293 million in 2006), sales are seen at EUR 2.2370-2.415 billion, up from EUR 2.357 billion in 2006, while net profit is forecast at EUR 185-200 million, down from 238 million in 2006. “We await solid results in the industrial divisions (although these divisions already performed at a good profitability level in 1Q 2006 also),” KBC Securities“ analyst Wim Hoste said in a note to clients. The fall in net profit is due to an absence of non-recurring items, whereas the 1Q 2007 benefited from the EUR 102 million capital gain on the sale of industrial foils, the analyst explained. Bernard Hanssens at Bank Degroof foresees a good performance “thanks to the industrial businesses, particularly the plastics division which should have benefited from strong European PVC demand and margins”. The analyst said the company“s chemicals division should post REBIT growth of 3% as robust pricing and soda ash volumes are expected to offset price pressure for some fluorinated products.