Clariant Declines as Currencies May Erode Profit

Clariant AG, the Swiss specialty chemicals maker, dropped to a two-month low after a MainFirst Bank AG analyst said currency swings and higher-than-expected debt levels may weigh on second-half results.

The shares fell as much as 3.8 percent to 14.63 Swiss francs, the lowest intraday price since Aug. 7. About 2.3 million shares traded hands, 58 percent more than the average daily volume of the past three months.

“Nasty” emerging market currencies and the dollar have declined against the Swiss franc, Bernd Pomrehn, the analyst, wrote in a note to investors. Clariant gets 21 percent of sales in emerging market currencies and 34 percent of sales in dollars, he estimates. Pomrehn downgraded the stock to underperform from outperform.

The dollar fell 3.8 percent against the Swiss franc in the past three months, while the Indian Rupee dropped 6.6 percent against the franc over the same period.

Clariant may end the year with debt of more than 1.4 billion francs ($1.5 billion), exceeding the company’s forecast of as much as 1.3 billion Swiss francs after lower-than-expected proceeds from a sale of textile, paper, and emulsions chemicals assets to SK Capital Partners LP announced earlier this month, Pomrehn said.

The shares traded 3.5 percent lower at 14.67 francs as of 1:14 p.m. in Zurich. Clariant is scheduled to report nine-month results Oct. 30.

Before it's here, it's on the Bloomberg Terminal.