Belgian chemical, plastic and pharma company Solvay SA 26 October 2007 posted an 8% increase in core earnings for the 3Q 2007, as booming construction markets in Asia and Latin America increased deman…
Belgian chemical, plastic and pharma company Solvay SA 26 October 2007 posted an 8% increase in core earnings for the 3Q 2007, as booming construction markets in Asia and Latin America increased demand for its industrial products. Recurring earnings before interest and tax, or REBIT, an operating result closely watched by analysts which removes one-off effects, rose to EUR 309 million from EUR 286 million in the same quarter 2006. Analysts were expecting a figure of around EUR 298 million. Net profit jumped 20% to EUR 218 million from EUR 181 million, helped by a EUR 54 million gain from the sale of a stake in Belgian investment company Sofina SA. The company said it is on the way to match the 2006 operating result at the end of the year. Sales over the quarter increased 4% to EUR 2.40 billion from EUR 2.31 billion, despite unfavorable currency exchange rates which cut two percentage points from the growth rate, Solvay said. All divisions contributed to the growth. In the chemical division REBIT rose 5% to EUR 87 million and sales were up 2% to EUR 761 million as a result of persistent strong demand from industry, and particularly from the booming construction sector in Asia and Latin America. The division makes a range of products including soda ash used to make glass and bleaching agent hydrogen peroxide. The result is better than expected, said analyst Wim Hoste, who covers the stock with a buy rating for KBC Securities.