Upturn in fortunes at DSM

Related tags Material The quarter at tropicana

DSM expects to see full year profits rise 50 per cent on last year,
said chairman Peter Elverding, after stronger than expected growth
in the third quarter continued the positive trend.

The Dutch chemicals group, now the world's biggest vitamins supplier, said third quarter sales remained level with the previous quarter at €1.94 billion, with Nutritional Products adding 36 per cent to sales.

It also saw autonomous sales growth of 11 per cent mainly due to higher volumes, particularly in Performance Materials and Industrial Chemicals.

The figures provided a sharp contrast with last year's third quarter when lower sales volumes, lower margins and new plant start-ups drove operating profits down to just €26 million. Higher sales and a reduced impact of raw material prices brought operating profits back up to €133 million for this year's same period, around the same level as the second quarter.

Profits have also been helped by a costcutting drive launched in last year's second half, which led to around 360 job losses during the quarter, contributing to a 7 per cent increase in operating profits at the Nutritional Products division over the prior three-month period.

Sales at this unit were however down 2 per cent from the second quarter to €479 million due to seasonal lower volumes in human health and slightly lower margins. In all segments - human health, pharma and personal care and animal nutrition - new products showed good sales-volume growth, according to the company.

Higher sales at the Food Specialities unit, which makes natural beta-carotene, arachidonic acid and cheese coatings, contributed to a 2 per cent rise in sales in the Life Sciences division, which also increased its prices for intra-Group supplies due to substantially increased raw materials prices.

Operating profits at Food Specialties and DSM Bakery Ingredients also improved on last year's third quarter but lower sales at DSM Anti-Infectives, which is facing historically low prices for penicillin and its derivatives in combination with the weak dollar, offset the result at the Life Sciences division.

Both Performance Materials and Industrial Chemicals saw sales increases of 20 per cent or more thanks to higher volumes and prices, with strong increases in operating profits.

Elverding said 2004 profit on ordinary activities should increase by 50 per cent from the €219 million in 2003 although he issued a word of caution about the economy.

"Although the economic climate improved in the first three quarters of this year and the underlying trend continues to be positive, the recovery in the USA and Europe is showing signs of vulnerability at the moment. In addition, the high energy prices pose a short-term threat to the economy, and the fact that the US dollar is currently weakening again does not help either."

Related topics Suppliers Antioxidants/carotenoids

Related news

Show more

Related products

show more

Is your brand reputation at risk?

Is your brand reputation at risk?

Content provided by FoodChain ID | 04-Oct-2023 | White Paper

FoodChain ID has developed a new white paper, “Current Food Supply Chain Threats - Is Your Company's Brand Reputation at Risk?” examining recent regulatory...

Robuvit® for Natural Energy and Mitochondrial Support

Robuvit® for Natural Energy and Mitochondrial Support

Content provided by Horphag Research | 01-May-2023 | Clinical Study

Robuvit® French oak extract is a caffeine-free natural energizer that provides support for managing fatigue and improving energy levels. Learn how this...

Redefining Cognitive Health with Neumentix™

Redefining Cognitive Health with Neumentix™

Content provided by Kemin Human Nutrition and Health | 18-Apr-2023 | Product Brochure

Find out how Neumentix™, a naturally sourced ingredient grown from patented spearmint high in polyphenols, may nourish the mind.

Follow us


View more