DSM Profit Beats Estimates as CEO’s Nutritional Bet Pays Off
Royal DSM NV (DSM) reported second-quarter profit that beat analyst estimates after Chief Executive Officer Feike Sijbesma got payback for $3.1 billion of acquisitions to expand in nutritional ingredients.
Earnings before interest, taxes, depreciation and amortization jumped 19 percent to 345 million euros ($457 million), the Heerlen, Netherlands-based company said in a statement today. The average estimate of 11 analysts surveyed by Bloomberg was 333 million euros. Sales increased 9 percent to 2.47 billion euros.
DSM is midway through a 120 million-euro savings drive as it targets 1.4 billion euros in earnings in 2013. CEO Sijbesma has set up a central task force to oversee and report back on a myriad of profit-boosting initiatives at struggling caprolactam and plastics businesses as well as newly acquired Omega 3 fatty acid operations. DSM is evaluating a sale of the caprolactam unit, two people with knowledge of the situation told Bloomberg last month.
“For the rest of this year, we will continue to fully focus on operational performance and on the integration of our acquisitions,” Chief Executive Officer Feike Sijbesma said in the statement. “The early successes of our profit improvement initiatives leave us confident that this group-wide program is well on track.”
Ebitda at the pharmaceutical and polymer intermediates units declined 18 percent and 13 percent respectively, while jumping 28 percent at the nutrition division. It reiterated its outlook today.
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