ZURICH (Reuters) - Swiss specialty chemicals maker Clariant CLN.S predicted on Thursday a slight rebound to close 2020 as cost-cutting steps, such as the elimination of 600 jobs, tempers the COVID-19 hit that dragged on its third-quarter performance.
Third-quarter operating profit (EBITDA) slipped 16% to 127 million Swiss francs ($140 million), with the profit margin narrowing to 14.2% from 14.5%. Sales slipped to 893 million francs from 1.04 billion a year earlier.
Clariant will have trimmed its workforce by nearly 600 workers by year’s end, Chief Financial Officer Stephan Lynen said, helping realize a significant share of the 50 million Swiss francs in annual savings it has forecast.
He said that would help protect profitability despite the COVID-19 slump, which spurred a third-quarter fall in revenue in Clariant’s three divisions, natural resources, catalysis and care chemicals.
“The 600-position reduction, we are on a very good course, we already expect a significant amount of savings in 2020, and we will...have more or less completed the reduction of all positions before the end of this year,” Lynen said.
“We anticipate still a COVID-19 impact on Q4, but less negative than the first nine months.”
The shares were little changed at 16.10 francs.
Lynen added that Clariant, which has been unloading units that account for a third of sales, could sign a deal with a buyer of its pigments division toward June 2021.
“In the course of the first half we might see, more toward the end of the first half, a potential signing of a deal,” Lynen said, adding that a new chief executive to replace interim boss Hariolf Kottmann, also the chairman, could be named by early 2021.
Clariant is a third owned by Saudi Basic Industries 2010.SE, and Lynan sees no signs the Middle Eastern company wants to change that.
Reporting by John Miller, editing by John Revill, Michael Shields and Kim Coghill
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