Sika Sees Rebound From First Quarter Hurt by Cold WeatherPatrick Winters
Sika AG, the world’s largest maker of construction chemicals, said it’s betting on a rebound in revenue later this year after colder-than-average weather in March in Europe and North America held back building projects.
First-quarter sales fell 1.1 percent to 1.04 billion Swiss francs ($1.12 billion) from 1.06 billion francs a year earlier, the Baar, Switzerland-based company said in a statement. Currency movements reduced revenue by 0.9 percent.
“Sika assumes that the construction projects held up by the wintry weather will get back on track and be brought to completion,” the company said.
March weather in the U.K. was the second coldest on record, according to the Met Office, and temperatures in France averaged 1.3 degrees Celsius colder than usual in March, according to that country’s Agriculture Ministry. Swiss companies are also grappling with the effects of a rising franc on exchange markets amid a recession in neighboring countries using the euro.
Sika’s figures “could drive consensus down by 1 percent for this year and beyond,” Patrick Laager, an analyst at Credit Suisse AG in Zurich, said in a note to clients. “Adding external growth is part of Sika’s strategy. We hope that management may be more active on this front this year.”
Chief Executive Officer Jan Jenisch dropped a mid-term annual sales-growth target of as much as 10 percent on Feb. 28, citing a “continuing uncertain situation” in Europe. The maker of Sikaflex sealant today reiterated a revenue-increase target of 4 percent to 6 percent for 2013.
Sika rose as much as 1.2 percent to 2,144 francs and was trading up 0.4 percent at 9:05 a.m. in Zurich.