HEERLEN, NETHERLANDS (March 1, 1 p.m. ET) — Royal DSM NV, the Dutch healthcare to materials group, expects a strong performance from its polymer intermediates business in the coming year, although it warned the division's pre-tax earnings would be lower than the “exceptional result in 2011.”
Announcing corporate sales of 9 billion euros ($11.99 billion) in 2011, up 11 percent, Feike Sijbesma, DSM's chief executive and chairman, said it had been another strong year for the business “despite the challenges of the global economy, adverse currency movements and high raw material costs.”
Noting the record-breaking trading of its polymer intermediates business Sijbesma said another strong performance was expected at a level above the historical average, but earnings before interest, tax, depreciation and amortization (EBITDA) will be “clearly lower than the exceptional result in 2011.”
“In 2012 three planned turnarounds in caprolactam, one in the first quarter of 2012 and two more in the third quarter, will also impact the results,” he added.
DSM's total EBITDA rose 12 percent to 1.3 billion euros ($1.7 bilion). The company also announced it proposed to increase its dividend per share by 7.4 percent.
Sijbesma said the company's polymer intermediate operation had delivered the highest profitability in its history on the back of a 70 percent increase in total sales to 380 million euros ($506.6 million).
Helped by higher prices full year organic sales growth in the polymer business came in at 32 percent, compared with what Sijbesma called “an already very strong performance in the previous year.”
DSM's performance materials arm saw full year organic sales growth of 9 percent, with total sales of 293 million euros ($390.6 million), up 3.5 percent.
Looking ahead, Sijbesma said the group was conscious that risks to the global economy remained and weakness in Europe and some of its key end markets, notably building and construction, still persisted.
“However, we believe that our balanced, relatively resilient portfolio in health, nutrition and materials, our broad geographic spread with a significant presence in high growth economies, together with our strong balance sheet, leave us well placed to achieve our ambitious 2013 targets,” he added.
DSM Engineering Plastics is in the process of moving its headquarters to Singapore.