Belgian chemicals giant Solvay has reported sales of €1.201 billion in the first quarter, an organic fall of 11.9% compared to particularly high sales figures in the same period last year.
Solvay noted that the volume of chemicals it sold in the first quarter of the year increased for the first time in seven quarters, and that the overall fall in revenues was due to price decreases as a consequence of lower energy and raw material costs.
Underlying EBITDA (earnings before interest, taxes, depreciation and amortization), a measure of profitability, fell to €265 million in the first quarter, down 13.6% organically compared to the same period in 2023. The EBITDA margin remained solid at 22.1%.
The company said that negative net pricing last quarter was partially offset by a growth in sales volumes and lower fixed costs. It highlighted that cost saving measures netted the company €19 million in the first quarter.
Solvay's underlying net profit for the first quarter of 2024 was €119 million, compared to €187 million in the first quarter of 2023.
Phillippe Kehren, CEO of Solvay, said that he is "proud" of the company's performance in the first quarter, "despite challenging macroeconomic conditions".
"Certain areas of our business have shown promising momentum compared to the trough from late 2023, but we cannot call it a recovery yet. We are rapidly deploying cost-saving initiatives that have already started to deliver. Looking ahead, we maintain confidence in meeting our targets for 2024. Our simplified portfolio, clear operating model and strong focus on cash are great assets to position Solvay for sustained success in the years to come," he said.
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Looking ahead to the rest of the year, the company said that despite some green shoots in the first quarter, the overall economic and geopolitical environment requires it to remain prudent.
In its unchanged 2024 outlook, Solvay forecasts that it will see underlying EBITDA fall by between 1o% and 20% (or by between €925 million and €1.04 billion).
Belgian multinational Solvay began operation in 1863, from a technological breakthrough by founder Ernest Solvay in the soda ash production process. The company now employs more than 9,000 globally and is listed on the Euronext Brussels and Paris stock exchanges.
In December of last year, Solvay separated its business into two independent entities, spinning off its more speciality and innovative materials production into a separate public company, Synesqo SA. Meanwhile, Solvay SA continues to focus on commodities, such as soda ash, peroxides, silica, and coatis.
