August 29, 2013 / 9:51 AM / 4 years ago

UPDATE 2-Tessenderlo profit warning sends shares to 20-year low

* Expects core profit in 2013 to be 20 pct below last year

* Gelatins and Akiolis unit core profit down 41 pct in Q2

* Competition rising in food waste processing in France

* Sees fertilisers, plastic pipes weak in second half

* Shares fall to 20 year low (Adds analyst comment, share reaction, detail)

By Robert-Jan Bartunek

BRUSSELS, Aug 29 (Reuters) - Belgian chemicals firm Tessenderlo issued a profit warning on Thursday, blaming increased competition at its food waste processing unit in France and cautious farmers not investing in fertilisers, sending its shares to a 20-year low.

The group, which had previously not given a forecast for 2013 earnings, said recurring core profit (REBITDA) would be about 20 percent below last year’s result.

Its shares dropped as much as 9.5 percent to 18.06 euros, their lowest since December 1993.

“Their full-year guidance is clearly below consensus expectations,” said ING analyst Filip De Pauw.

According to a Reuters poll, analysts were on average expecting recurring core profit to fall 3.7 percent to 155 million euros this year, from 161 million in 2012.

Tessenderlo said its Akiolis unit, which prepares waste from the food industry for use in animal feed and other applications, was seeing increased competition in France for its waste collection services, without providing further details.

Its Gelatins business, which prepares the bones and skins of mammals for use in sweets and other applications, was also suffering due to higher raw material prices, it added, again without elaborating.

Collectively, the Gelatins and Akiolis business units saw a 41 percent fall in core profit in the second quarter, it said.

The firm’s Kerley unit, which makes fertilisers and water treatment chemicals, saw a 7 percent increase in core profit in the second quarter because of favourable weather conditions in the United States after an initially delayed planting season.

However, it added that because of the expectations of a good harvest season and resulting lower crop prices, farmers were wary about future investment in fertilisers, which would likely lead to lower profits in the second half of the year.

Tessenderlo also said its plastic pipes business would continue to suffer from a weak construction sector, notably in the Netherlands.

Overall, recurring core profit in the second quarter fell 11.6 percent to 49.0 million euros, below the 53.6 million expected in a Reuters poll of three analysts.

$1 = 0.7496 euros Editing by Philip Blenkinsop and Mark Potter

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