April 29, 2009

DSM has reported a profitable first quarter of 2009 despite difficult economic conditions, but the results are still down 76 percent compared to the first quarter of 2008.

First quarter profit reached EUR57 million (US$75.2 million) due to the sharp reduction in economic activity.

 

The economic downturn heavily affected nearly half of DSM's businesses, in particularly those involved with the automotive, electrical and electronics, and

 

DSM Agro's business came under pressure, because of the late start of the fertiliser season and customers' cautious purchasing behaviour, which was also reflected in lower prices.

 

The Nutrition and Pharma clusters and DSM Dyneema showed resilience because their end-markets are less affected by the downturn.

 

Sales dropped 22 percent compared to the first quarter of 2008, and virtually all businesses experienced a drop in demand.

 

The Animal Nutrition the Health unit experienced weakness in demand, with prices in Nutrition remaining at the fourth quarter level but reflected the increase in 2008 on a year-on-year basis.

 

But the Nutrition continued to perform strongly, profiting from price increases implemented last year. The Pharma result was stable, although at too low a level.

 

The general economic outlook continues to be poor, as financial markets remain weak and consumer confidence low.

 

Feedstock and energy prices and exchange rates continue to be volatile. End-market conditions are not expected to improve shortly but further deterioration is not expected either.

 

The effect of de-stocking on the business is expected to diminish. Assuming a bottoming-out of feedstock prices DSM does not expect further inventory write-downs.

 

Feike Sijbesma, chairman of the DSM Managing Board, said, "Actions to reduce costs will continue unabated, and we now expect to over-deliver on our targeted savings of EUR100 million (US$132 million) by 2010."