Clariant Shares Fall as Dividend Disappoints Investors

  • Says confident can achieve growth in local currencies in 2016
  • Chemicalmaker on track to meet mid-term profit margin target

Clariant AG fell the most in almost six months on disappointment the Swiss chemicals maker held back from a dividend raise following improved 2015 cash flow and profit margins.

Earnings before interest, taxes, depreciation, amortization and one-time items fell 1 percent to 229 million francs ($232 million) in the fourth quarter, the maker of cosmetic ingredients and pigments said Wednesday in a statement. Cash flow rose to 502 million francs, while the proposed dividend was flat at 0.40 francs a share.

Clariant results “slightly disappointed on the bottom-line and in terms of dividends,” Ute Haibach, an analyst at J. Safra Sarasin, wrote in a note. With a dividend yield of 2.5 percent, Clariant is still below peer average, analysts at Morgan Stanley noted. The shares fell as much as 5.4 percent, the most since Aug. 24, and traded 4.1 percent lower at 15.58 francs at 12:20 p.m. in Zurich.

Chief Executive Officer Hariolf Kottmann, who took the helm in 2008, has restructured Clariant by cutting costs and selling lower-margin businesses. The measures have helped widen Clariant’s annual profit margin to 14.7 percent last year from 12.7 percent in 2010 and the company said it’s on track to reach its mid-term target of 16 to 19 percent.

The CEO quelled hopes of a takeover bid, saying there had been no “serious” approaches made on the company. Over the years, Clariant has been cited as a potential takeover target for companies including BASF SE, Dow Chemical Co. and Evonik AG. The Muttenz, Switzerland-based company said it had no plans for major acquisitions at the moment.

“We are extremely active in M&A and it plays an important role in our strategy to reposition and to reduce our dependency on the industry cycle,” Kottmann said in an interview with Bloomberg. “For the time being we have no large, transformational acquisition under negotiation or on our radar screen.”

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