DSM Profit Boosted by One-Offs, Mulling Acquision: CEO
DSM Chairman and CEO Feike Sijbesma told CNBC he expects the Dutch chemicals firm to perform well in the second half of the year following strong second quarter results which saw a boost in net profit, while revenue fell just shy of the Reuters average forecast.
Second quarter net profit hit 392 million euros ($560 million) compared to an average forecast of 377 million euros ($538 million) and revenue reached 2.265 billion euros ($3.234 billion) against an average forecast of 2.325 billion euros ($3.320 billion).
Sijbesma said net profit had almost doubled due to one-time gains on asset sales, such as the divestment of DSM Elatomers and the sale of its shares in Danisco.
"All over the second quarter was a strong quarter for DSM, stronger than the second quarter in 2010 and even stronger than the first quarter of 2011, so I think we can look back on a solid and strong performance by DSM in the second quarter," Sijbesma said.
He added that the firm continued to enjoy strong growth in Asian markets and he expects this to continue, despite global uncertainty over the growth outlook.
"I read the same newspapers and I watch the same TV programs and there is uncertainty in the world, however there still a general economic forecast which is not too bad for the second half of the year and even in certain areas good… in China, Asia is still showing very good growth and I expect DSM to perform well and have a good 2011," he explained.
M & A Activity
Sijbesma said DSM had successfully passed on rising raw materials costs, but its Swiss-based nutrition unit had been impacted by a strong Swiss franc.
"Our nutrition business which is mainly based in Switzerland is of course suffering from the Swiss franc; we've tried to compensate for that with some cost measures and some efficiency measures, but of course we cannot influence the Swiss franc," he said.
On further M&A activity by the firm, Sijbesma confirmed DSM was evaluating a possible acquisition of animal feed business Provimi with Nutreco.
"There were some rumors in the market and we responded with Nutreco teaming up to evaluate the possible acquisition of Provimi which is owned by Premier and we have confirmed that," he said.
However, Sijbesma stressed there was no more he could add on a possible deal.
DSM shares opened up 1.76 percent following the firm's second quarter results.