OC Oerlikon expects to be ready for division split in 2025
Adds share move in paragraph 5, adds analyst comments in paragraphs 8-9
By Chiara Holzhaeuser and Louis van Boxel-Woolf
May 7 (Reuters) -Swiss fibre and metal coatings maker OC Oerlikon OERL.S expects to be ready to split off its polymer processing division by the beginning of 2025, CFO Philip Mueller said on Tuesday.
He was speaking after the company reported higher than consensus estimates for first-quarter earnings, sending its shares up 12.7% by 1143 GMT.
"Internally we will be ready for a separation by at the latest on January 1, 2025," Mueller said on an earnings call, referring to operations such as IT and HR.
The final form of the split, whether it be a divestment, spin-off or IPO would likely be announced later, he added, saying the process should take 12-36 months.
OC Oerlikon, which makes glossy coatings for precious metals, said in February it would focus exclusively on metal coatings.
The group reported 642 million Swiss francs ($707.83 million) in new orders for the first quarter on Tuesday, beating a company-compiled consensus of 572 million by 12%. Order intake in OC Oerlikon's polymer processing business came in 27% ahead of consensus estimates.
A revival of small- and mid-sized orders as well as government support in China boosted orders at the division, Mueller said on the call. However, shipping delays in the Red Sea and postponed customer investments impacted sales negatively.
"Oerlikon reported a strong set of 1Q 24 numbers, with all lines beating market expectations," Michael Roost, an analyst at Baader Helvea said in a note.
The rise in new orders quarter-on-quarter in the polymer processing business shows that "the absolute declines appear to have now definitively come to an end", Roost said.
The company's core operating profit (EBITDA) in the first quarter was down 28.8% against the same period last year, but beat analysts' expectations by 9%. The CFO attributed the consensus beat to strict cost management as well as price adjustments.
OC Oerlikon confirmed its 2024 guidance.
($1 = 0.9070 Swiss francs)
Reporting by Chiara Holzhaeuser and Louis van Boxel-Woolf; Editing by Savio D'Souza, Rashmi Aich and Susan Fenton
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