Personal care drives Cognis results
Cognis are driven by particularly strong sales growth for the
company's Care Chemicals division - but profits are hit by
The company reported that net sales for the nine months ending in September were up 3.9 per cent to €2.65bn, which represented growth of 6 per cent in organic terms - excluding the effects of currency exchange, divestments and acquisitions. Operating profits rose by 2.5 per cent for the period, to reach €311m, but the company's bottom line was significantly impacted by hikes in commodity prices that affected all three of the company's divisions. The company singled out rises in natural oils, milk derivatives and petrochemical raw materials as being the major reasons for the higher costs. Earnings before interest and taxes grew by 2.3 per cent to €164m, while net losses came in at just €82m, impacted by refinancing transactions and tax reforms. The company recently refinanced €2bn worth of its debts, allowing it to make significant savings in interest payments, which it said had more than off-set rises in commodity prices. The company's Care Chemicals division, which primarily serves the personal care industry, reported sales growth of 6 per cent to reach €1.086bn, primarily driven by demand for surfactants and performance ingredients. These results over-shadowed the results for all the other divisions, as Functional Products reported sales growth of 3.4 per cent to €665m, Nutrition & Health grew 4.4 per cent to €251 and Pulcra Chemicals sales fell by 3.4 per cent to reach €187m. As well as rising commodity costs, poorer results in some of the divisions were also blamed on the downturn in the US market, in connection with the slowdown in the US housing market. "We are currently confronted with a number of challenging factors simultaneously, but we have been able to counteract the effect of these by improving our position in our key markets driven by the wellness and sustainability trends, by successful cost management, and by partially offsetting the increases in raw materials costs," said CEO Antonio Trius. Looking ahead to the full year results, the company said it expects earnings to keep rising, as improved efficiencies and cost structures should counteract tough market conditions.