Evonik Quarterly Earnings Miss Estimates on Lower Selling Prices

Evonik Industries AG (EVK), Germany’s second-largest chemical maker, reported first-quarter earnings that missed analysts’ estimates amid lower selling prices for amino acids.

Adjusted earnings before interest, tax, depreciation and amortization dropped 24 percent to 463 million euros ($643 million), the Essen-based company said today in a statement. Analysts had estimated 477.9 million euros, according to a Bloomberg survey.

Chief Executive Officer Klaus Engel is pushing a savings drive, including job cuts and slimming the executive board, to help meet a 2014 earnings target of 1.8 billion euros to 2.1 billion euros. The company is already implementing about 300 million euros in cuts out of a target of 500 million euros set for the end of 2016, it said today. Another administration cost-cutting program will start in the second half of the year.

“Selling prices for some important products were well below the year-back level due to challenging market conditions,” Engel said in today’s statement. “However, they were slightly better than at year-end 2013.”

First-quarter sales were unchanged at 3.2 billion euros. Analysts had predicted 3.28 billion euros. Net income declined 43 percent to 166 million euros in the quarter.

Sales at the company’s nutrition unit dropped 5 percent in the quarter. Even though Evonik sold more products, selling prices for amino acids and animal nutrition were lower, it said. Prices for the company’s most important amino acid, methionine stabilized compared with the previous quarter, Evonik said.

The chemical maker is sticking to a full-year target for sales to rise slightly from last year’s 12.7 billion euros, it said today.

To contact the reporter on this story: Sheenagh Matthews in Frankfurt at smatthews6@bloomberg.net

To contact the editors responsible for this story: Simon Thiel at sthiel1@bloomberg.net Kim McLaughlin, Robert Valpuesta

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