German chemical distributor Brenntag AG (BNTGF.PK) reported Wednesday higher profit for its second quarter as sales climbed despite more difficult market conditions. Earnings after tax and operating EBITDA, a key earnings performance metric, missed analysts' estimates, while sales beat their view. For fiscal 2012, the company projects higher EBITDA. Brenntag shares declined around 3 percent in the morning trade on Frankfurt's Xetra.
Profit after tax grew 20.4 percent to 81.4 million euros and profit attributable to shareholders climbed 23.1 percent to 81 million euros. Earnings per share increased 22.7 percent to 1.57 euros.
Operating EBITDA amounted to 184.4 million euros, a growth of 10 percent from last year, thanks to the successful growth strategy and the acquisitions closed in 2011 in particular. The company added that positive impact of efficiency-enhancement program in Europe also benefited the results.
Sales increased 14.6 percent to 2.49 billion euros from prior year's 2.17 billion euros. Sales grew 9.6 percent based on constant exchange rates.
For the first half, operating EBTIDA grew 9.2 percent to 355.9 million euros and sales increased 13.4 percent to 4.88 billion euros.
European region developed well with higher sales and earnings, despite difficult and uncertain macroeconomic environment. The company noted that the efficiency enhancement program implemented in the first quarter already shows positive impacts.
In North America, earnings and sales climbed in double-digit rates as it continues to grow in a slower economic development. Latin America's results also were higher than last year.
Asia Pacific region also posted higher results mainly on the acquisition of the Zhong Yung Group. Although the overall economic situation in Asia-Pacific is still marked by growth, the growth rates have clearly declined compared to the previous year, the company said in its statement.
CEO Steven Holland said, "Brenntag operates successfully even in the current challenging economic conditions. A balance of organic growth, including efficiency gains, and acquisitions has placed our highly diversified group in a strong position to weather the current worldwide economic challenges, which for some regions became more pronounced in the course of 2012."
Looking ahead for fiscal 2012, the company expects operating EBITDA of 705 million euros to 735 million euros, compared to last year's 660.9 million euros.
Brenntag assumes that because of the difficult economic conditions in some countries, regional differences in the growth rates can be seen in the next months as well. The company said it is well positioned in current macroeconomic situation thanks to high diversification.
Holland added, "Although we are confident about the future, we remain vigilant and will respond, should we feel further steps are required to position the business defensibly in case the macro-economy deteriorates."
Brenntag shares are currently trading at 89.93 euros, down 2.57 euros or 2.78 percent on Xetra.
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