ZURICH (Reuters) -Speciality chemicals maker Clariant raised its full-year sales guidance on Thursday and said it was confident of passing on an “unprecedented” increase in raw material and energy costs to customers.
The Swiss company is the latest to warn about shortages as suppliers struggled to keep pace with resurgent post-pandemic demand.
Clariant, whose products range from catalysts for chemical production and fuel processing to chemicals for personal care products and paints, said its costs had leapt by 25% in the third quarter.
Some products like ethylene and propylene derivatives had seen increases of 50%.
Chief Executive Konrad Keijzer told reporters Clariant had responded by lifting prices by 9% and was confident that would be accepted by customers.
“The company hasn’t had such a significant price increase in one quarter, year on year, in its history. We are also seeing an unprecedented environment in terms of raw material inflation.
“We do expect to pass this on to our clients, we are confident. Right now we are about two thirds of the way in terms of passing it through.”
German chemicals company BASF on Wednesday said higher procurement costs were weighing on its businesses making farming pesticides, coatings and nutritional supplements, where margins and earnings slipped.
Clariant improved its profit margins during the third quarter while its sales beat analyst forecasts, boosting its shares 4% in early trading.
“The company is doing well in the difficult situation,” said Vontobel analyst Sibylle Bischofberger.
Sales rose 23% to 1.10 billion Swiss francs ($1.20 billion) in the three months to the end of September, better than the 1.05 billion francs expected by analysts.
Core earnings (EBITDA) increased by 42% to 180 million francs at a margin of 16.4%, up from 14.2% a year previously.
Clariant now expects full-year sales, in local currencies, to rise 9-11%, up from previous guidance of 7-9%. It confirmed previous guidance for a full-year EBITDA margin of 16-17%.
($1 = 0.9185 Swiss francs)
Reporting by John Revill Editing by Michael Shields and Mark Potter