Feb. 7 (Bloomberg) -- Umicore SA, the world’s largest precious-metals recycler, fell the most in nine months in Brussels after forecasting a profit drop because of lower prices for some metals, reduced demand from the photovoltaic and display industries and a weak European car market.
“Clearly this is a nasty surprise,” Wouter Vanderhaeghen, an analyst at KBC Securities NV in Brussels, wrote today in an investor note. He cut his price estimate for the shares to 36 euros from 41 euros, adding that results were “close to our and consensus expectations.”
Earnings before, interest, tax and special items will probably decline from 372.1 million euros ($504.8 million) last year, the Brussels-based company said today in a statement. Analysts projected an increase to 393.3 million euros, according to the average of 15 estimates compiled by Bloomberg.
Umicore tumbled as much as 6.4 percent on Euronext Brussels, the biggest intraday drop since April 24, and traded 1.78 euros lower at 36.91 euros by 11 a.m. local time.
Two planned shutdowns of the recycling facility in the Belgian town of Hoboken, rising costs for expansion projects and lower prices for specialty metals such as tellurium and indium, which can’t be hedged, will reduce profit from the recycling division, Umicore’s most profitable business, this year.
Umicore also joined Johnson Matthey Ltd. in saying that a narrowing share of diesel engines in a European car market that’s expected to remain “weak” is affecting margins in catalysts. Demand for germanium substrates and rotary sputtering targets won’t recover after last year’s collapse, triggering job cuts, Umicore said.
To contact the reporter on this story: John Martens in Brussels at email@example.com
To contact the editor responsible for this story: Jerrold Colten at firstname.lastname@example.org