Company saw profits, sales rise
DSM saw its profits rise 13 percent in the third quarter to EUR365 million (US$426 million).
The company said sales were up 7 percent in the third quarter, and the nutrition segment saw an 8 percent increase in organic sales growth while the materials segment saw 9 percent volume growth.
“We are pleased to report another strong quarter, resulting in a very good performance during the first nine months,” said Feike Sijbesma, CEO and chairman of the DSM managing board. “Nutrition and Materials once again delivered organic growth rates well above their respective markets, with particularly good volume growth.
“These results demonstrate significantly improved operational and financial performance, well ahead of plan, with all businesses delivering on their ambitious growth initiatives, and we are firmly on track with our cost-reduction and efficiency improvement programs,” Sijbesma said.
DSM confirms its full year 2017 outlook, despite slightly less favorable currency developments.
Animal Nutrition & Health segment
In the Animal Nutrition & Health segment, the first nine months of 2017 sales saw 8 percent organic growth, fully driven by volumes, significantly outperforming the market. DSM continues to benefit from its ability to address a wide range of species, as well as from its diversified geographic presence, covering all the major growth areas in the world, and its strong forward-integrated premix position. Market conditions were favorable year-to-date, except for Latin America where domestic demand was impacted by weak economic conditions. This weakness was exacerbated in the second quarter due to the “meat scandal” in Brazil, severely impacting beef exports. Recently however, these exports have recovered swiftly.
Overall prices were flat, while for some vitamins a positive price effect in the first half of the year was offset by a negative price effect in the third quarter.
Organic growth was exceptionally strong at 10 percent, driven by 14 percent higher volumes. All regions were strong. The beef exports market in Brazil staged a rapid recovery, especially in September. Sales also benefited from positive timing of order effects in Brazil as well as in some other geographies. Furthermore, the reported sales growth is somewhat flattered by the easy comparison with Q3 last year.
Prices had a 4 percent negative effect, which was largely due to lower comparable prices for some of the vitamins versus 2016, when these prices spiked in the second half of the year.