February 23, 2018 / 5:59 AM / a year ago

Sika earnings beat estimates as Saint-Gobain still looms

ZURICH, Feb 23 (Reuters) - Sika reported better-than-expected 2017 net profit on Friday as France’s Saint-Gobain said it remained confident it would win its protracted takeover battle for the Swiss construction chemicals maker.

Sika, whose products helped waterproof the Gotthard rail tunnel under the Alps, said net profit rose 14.5 percent to 649 million Swiss francs ($694 million), slightly better than the average estimate of 643 million francs in a Reuters poll of analysts.

Sika had previously announced 2017 sales rose 8.7 percent to a record 6.25 billion francs, supported by seven acquisitions and nine new factories it built last year.

The company said it was aiming to increase sales by more than 10 percent during 2018, confirming the outlook it gave in January, and said it expected its operating profit to grow at a “disproportionately” high rate.

It proposed increasing its 2017 dividend to 18.5 francs per registered share from 16 francs for 2016.

Saint-Gobain, which has been trying to seize control of Sika since the end of 2014, was also upbeat about prospects for the construction industry when it posted its earnings on Thursday.

The French group, which reported annual operating profits up 7.5 percent, said it “remains fully confident in the outcome of its plan to acquire a controlling interest in Sika”. Its chief executive said he was “totally aligned” with Sika’s founding Burkard family, who want to sell their controlling stake.

Sika on Friday said the “unknown outcome of the Saint-Gobain’s hostile takeover attempt remains an element of uncertainty for the future”.

Sika has fought the Burkards in court over their plan to sell their 16 percent stake to Saint-Gobain, an attractive deal because the holding carries nearly 53 percent of voting rights.

The founding family wants to extend their agreement with Saint-Gobain, although Sika’s rising share price has made Saint-Gobain’s original offer of 2.75 million francs less attractive.

Sika’s stock has gained 43 percent in the past year, massively outpacing the Stoxx 600 Chemicals Index which has risen 6.6 percent and Saint-Gobain which has lost nearly 3 percent.

The next court decision — centring on the family’s voting rights — is expected in the next few months. ($1 = 0.9348 Swiss francs) (Reporting by John Revill; Editing by Michael Shields)

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