DSM reports strong organic sales growth driven by higher vitamin prices in Q1

NETHERLANDS – DSM first quarter 2018 results have featured continued strong organic sales growth by 11% in addition to higher prices in some vitamins as a result of exceptional supply disruptions in the industry.

While net profit increased 122% to US$391.8 million, DSM expects an Adjusted EBITDA growth towards 25% as it expects sales to keep rising and costs to drop for the full year 2018 outlook.

The first quarter benefited from estimated US$260.4 million additional sales from vitamin price environment mainly related to animal nutrition, which DSM said was expected to be temporary and heavily weighted towards the first half of the year.

Reuters reported that the vitamin price benefit added US$195.3 million to EBITDA in the first quarter, with the total effect for 2018 estimated between US$296.91 million and US$356.25 million.

“We are very pleased that the strong underlying performance of our business continues, with growth well above market.

Also, we are currently benefitting from substantially higher prices in some vitamins due to exceptional supply disruptions in the industry, which are expected to be temporary and heavily weighted towards the first half of the year,” said Feike Sijbesma, CEO/Chairman DSM Managing Board.

Nutrition segment delivered above-market growth, surpassing its Strategy 2018, the health, nutrition and materials business driven by global megatrends including High Growth Economies, Innovation and Sustainability.

Organic sales growth was estimated at 12%driven by strong volume growth of 8 percent where higher prices in the quarter offset the 11% negative foreign currency effects and higher input costs.

Human nutrition and health segment recorded 5% growth in volumes witnessed across all regions and market segments but was significantly strong in premix sales as well as in the i-Health business.

Organic sales were up 8%, prices rose 3% due to strong growth in premix and i-Health as well as benefits from higher prices for premix and advanced formulations, supported by the effects of the ‘Blue Skies policies’ in China, according to DSM.

Sales volumes in food specialties were stable as growth in especially enzymes was offset by lower volumes in savory due to production interruptions.

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