By Mauro Orru
Solvay SA's shares fell Wednesday after the company reported its results for the fourth quarter of 2019, saying it expects the coronavirus epidemic to harm its first quarter of 2020.
Solvay shares trade 3.5% lower at EUR88.10 at 1011 GMT.
"Solvay already flagged a soft 2020 at the 3Q update but now sees the impact of Covid-19 as an additional headwind," said Stijn Demeester, analyst at Dutch bank ING. The Belgian chemical company said it also expects the production halt of Boeing Co.'s 737 MAX and challenges in the oil-and-gas market to affect its first quarter of 2020.
"The impact from coronavirus is estimated to be around 25 million euros ($32.3 million) in 1Q with further updates should the impacts last longer than expected," said analysts at U.S. bank Citi.
Solvay's net profit for the quarter fell to EUR163 million from EUR208 million the previous fourth quarter, with net sales declining to EUR2.4 billion from EUR2.57 billion.
Earnings before interest, taxes, depreciation, and amortization decreased slightly to EUR525 million from EUR531 million, with earnings before interest and taxes falling to EUR306 million from EUR325 million.
Massimo Bonisoli, analyst at Italian investment bank Equita Sim, said Ebitda is lower than an expected EUR535 million and pretty much in line with consensus at EUR525 million, although profit came in lower than an expected EUR227 million and consensus at EUR247 million.
"The share price, after the recent performance, is already discounting in our view a more-negative scenario than the current outlook," Mr. Bonisoli added.
Solvay said it expects organic underlying Ebitda to fall between 0% and 3% year-on-year in 2020.
"Solvay management finds itself in a turbulent year at the start of their strategy period of 2020-24. 2020 guidance is well below the outlook period guidance of mid-single-digit Ebitda growth which leaves much to do in the outer years," said Citi analysts.
Solvay said 4Q figures are underlying.
Write to Mauro Orru at firstname.lastname@example.org; @MauroOrru94