Solvay (EBR:SOLB), the Belgian chemical company, has reported a significant decline in its Q3 profits and sales, attributed to weak demand and a 15% volume drop. The company also saw a 5% price dip, according to a report in WSJ on Friday.
Net profit for the company fell to €220 million from €451 million in the previous year. In addition, net sales also experienced a 24% decline, dropping to €2.75 billion. These figures failed to meet the projected €271 million and €3.03 billion, respectively.
The company's EBIT also underwent a 31% decrease, landing at €365 million. This downturn comes after Solvay issued a warning during Q2 regarding its financial performance.
Despite these challenges, Solvay remains committed to its shareholders and has announced an interim dividend of €1.62 (EUR1 = USD1.0711) per share, slated for distribution on January 17, 2024. This represents 40% of the total 2023 dividend.
Looking forward, the company expects its EBITDA to fall at the lower end of its forecast range, which predicts a decline of 5% to growth of 2%. This is consistent with the company's earlier warning and reflects ongoing market challenges.
InvestingPro Insights
The recent performance of Solvay has been a topic of discussion among investors. According to InvestingPro, Solvay yields a high return on invested capital and has a high shareholder yield. These InvestingPro Tips suggest that despite the recent dip in profits and sales, the company has a strong financial base that could potentially weather these challenges.
InvestingPro data further reveals that Solvay has a market capitalization of $11262.51 million and a P/E ratio of 7.91 as of Q2 2023. Furthermore, the company's revenue stood at $16778.7 million during the last twelve months as of Q2 2023, despite the reported sales decline.
The company's stock generally trades with low price volatility and has maintained dividend payments for 32 consecutive years. This, coupled with the company's commitment to its shareholders, as evidenced by the recently announced interim dividend, suggests that Solvay remains an attractive prospect for investors seeking consistent returns.
In all, InvestingPro offers over 10 additional tips for Solvay, providing a comprehensive guide to potential investors. These insights can be particularly valuable in making informed investment decisions.
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