Royal DSM Boosts 2019 Outlook

(Bloomberg) --

Royal DSM NV reported a profit beating the highest analyst estimate, and increased its outlook for this year as the Dutch company remains confident amid continued positive momentum.

• DSM expects a high single digit increase in adjusted earnings before interest, taxes, depreciation and amortization for the full year compared to the prior twelve months, up from a mid-to-high single digit increase expected earlier this year.
• Adjusted earnings before interest, taxes, depreciation and amortization came in at 424 million euros, up 14 percent on last year’s result corrected for the positive temporary vitamin effect. Analysts expected 400.6 million euros, according to Bloomberg data.

Key Insights

• With the earnings beat, Chief Executive Officer Feike Sijbesma builds further on years of profit growth, and a pledge earlier this year to return 1 billion euros ($1.1 billion) in excess cash to shareholders.
• Divestments of non-core pharmaceutical joint ventures -- including Patheon and Fibre Intermediates -- for a total of about 3 billion euros left the Dutch company with a strong financial position and balance sheet.
• DSM is making progress on innovations such as through its joint venture with Evonik Industries AG on omega-3 fatty acids from natural marine algae, and it’s seeking regulatory approval for a project called ‘clean cow’ to lower methane emissions from cattle by more than 30 percent.

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