FX.co ★ Brenntag Q2 Profit Down On Weak Sales; Says More Cautious On FY24

Brenntag SE (BNTGF.PK), a prominent German chemical manufacturer and distributor, revealed on Tuesday a decline in profits for the second quarter, driven by reduced sales. Despite this, the company has upheld its recently revised fiscal 2024 outlook, albeit with a more cautious approach.

For the second quarter, profit attributable to Brenntag shareholders decreased to 149.1 million euros, down from 186.9 million euros in the same period last year. Earnings per share dropped to 1.03 euros from the previous year's 1.23 euros.

The operating EBITA for Brenntag stood at 297.1 million euros, representing a year-on-year decline of 10.6 percent. This decrease is attributed to higher volumes failing to offset the reduced gross profit per unit margins from the previous year, coupled with slightly increased costs.

However, there was a significant sequential improvement in operating EBITA.

Despite ongoing pressure on chemical selling prices, operating gross profit slightly increased by 0.7 percent to 1.03 billion euros, buoyed by various pricing initiatives.

The company reported sales of 4.18 billion euros for the second quarter, a 1.9 percent decrease from the 4.26 billion euros recorded a year ago. Sales declined by 2 percent at a constant exchange rate.

Looking forward to fiscal 2024, Brenntag now forecasts an operating EBITA between 1.10 billion euros and 1.20 billion euros, a range adjusted on August 12. To achieve this target, the company plans to maintain a focus on margin management and cost discipline.

Brenntag has noted that recent market trends and industry expectations in the chemical sector contribute to a more cautious outlook for the remainder of the year.

Christian Kohlpaintner, Chief Executive Officer of Brenntag, said, "Looking beyond 2024, we anticipate that the current sequential improvement in demand will extend into 2025, driven by the general recovery of the chemical cycle and an enhanced pricing environment."