Reduces projected profit for Brenntag
In a recent financial update, DAX-listed chemical distributor Brenntag reported a 71% year-on-year decrease in net income attributable to shareholders for the second quarter, amounting to €42.9 million. The company's revenue for the quarter shrank by approximately 4% to €3.9 billion.
The financial results fell short of Brenntag's expectations, with the operating profit for the quarter representing a decrease of almost 14% at €246.4 million. The company's revenue for the first half of the year stands at just under €3.9 billion.
Key contributing factors to this decline include reduced demand in the chemical distribution market, pricing pressures, currency headwinds, and special items and impairments related to goodwill and intangible assets primarily in the Essentials segment in Latin America. Despite some volume gains in regions such as EMEA, Latin America, and APAC, these were offset by lower prices and external pressures.
To counteract these challenges, Brenntag accelerated its cost containment program, generating €30 million in savings in Q2 and targeting €300 million annual savings by 2027 to offset margin pressures. The company is also pursuing strategic acquisitions and focusing on sustainability efforts as a long-term resilience strategy.
In a statement, the outgoing CEO of Brenntag, Christian Kohlpaintner, reported persistent uncertainties, dampened customer sentiment, reduced demand, and unfavourable Euro/US dollar exchange rates as factors affecting the company's business development.
Brenntag's management has updated its EBITA target for 2025, setting it between €0.95 to €1.05 billion. The preliminary data for the second quarter was provided by Brenntag in mid-July, with the quarter ending on June 30, 2023.
Despite the challenges faced, Brenntag remains committed to its strategic initiatives and adaptations, aiming to navigate the market turbulence and position itself for long-term success.
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