Brenntag Pares Top End Hopes for Profit as Economies Weaken
Brenntag AG (BNR), the chemical distributor aspiring to join Germany’s benchmark DAX index, pared the top- end of its forecast for 2012 profit as economies weaken and third-quarter earnings came in below analsyts’ estimates.
Brenntag now expects earnings before interest, tax, depreciation, amortization and transaction costs of 705 million euros ($907 million) to 725 million euros, the Muelheim an der Ruhr, Germany-based company said today in a statement. Previously the chemical distributor had predicted as much as 735 million euros.
“Brenntag currently does not expect a positive lift in demand over the remainder of the year,” the company said in today’s statement.
Deteriorating economies in Europe are clipping Brenntag’s growth rate in its home region. Chief Executive Officer Steven Holland is responding by driving expansion in China and other emerging markets, where growth remains more resilient as manufacturers seek more flexibility in purchasing raw materials. Last year’s purchase of Zhong Yung Group lifted Asian earnings.
Third-quarter Ebitda rose 1.9 percent to 167.7 million euros, missing a 184.7 million-euro analyst estimate. Sales gained 12 percent to 2.47 billion euros, compared with a 2.42 billion-euro prediction, according to a Bloomberg survey.
The German company set aside 10 million euros to settle a potential fine from the French competition authority, which is investigating whether it breached trading rules from 1997 to 2007, Brenntag said in its quarterly report. Regulators have yet to make a final decision, spokesman Hubertus Spethmann said today by e-mail.
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