Swiss EMS Chemie's sales slip on depressed demand and higher costs
Adds currency impact in paragraph 2, analyst comments in 3
April 25 (Reuters) -Swiss nylon manufacturer EMS Chemie EMSN.S reported an 11% drop in first-quarter net sales on depressed consumer demand and lingering high raw material and freight costs, it said on Thursday, while confirming its 2024 forecast.
First-quarter net sales dropped to 545 million swiss francs ($596.2 million), in line with expectations, with the company citing a subdued global economy and a nearly 7% hit to sales from a stronger Swiss franc than in the same period last year.
The company started to increase prices at the end of the first quarter and should continue to do so in the second quarter, Mirabaud analyst Anja Pomrehn said in a note predicting improved net operating profit and margins over the first half.
EMS Chemie confirmed its 2024 outlook for net sales to remain consistent with 2023 while operating profit is projected to be slightly higher than last year.
The company expects the economic environment to remain challenging, it said, citing delays to interest rate cuts and geopolitical turbulence as significant factors affecting demand.
Its primary High Performance Polymers business reported an 11% fall in net sales to 493 million Swiss francs.
The Specialty Chemicals arm, a smaller segment that contributes about 10% of total revenue, registered a decline of 13.5% year on year.
($1 = 0.9141 Swiss francs)
Reporting by Alberto Chiumento
Editing by Janane Venkatraman and David Goodman
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