# DSM misses Q1 forecasts due to weak volumes and high costs
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-05-02
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: DSM Q1 Results Miss Expectations Due to Weak Volumes and
Meta Description: Learn why Dutch chemicals maker DSM's Q1 profit and sales missed expectations due to weak volumes, high inflation, and low vitamin prices.
URL: https://financedigest.com/dsm-misses-q1-forecasts-due-to-weak-volumes-and-high-costshtml

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(Corrects company description in 5th paragraph)

(Reuters) – Dutch specialty chemicals maker DSM’s first-quarter profit and sales missed expectations on Tuesday, hit by weak volumes, persistently high inflation and low vitamin prices.

DSM and Firmenich reported quarterly results separately for the last time ahead of the completion of their merger due next Monday.

The merger, agreed in May 2022, creates a major player in the fast-growing food ingredients and health [products markets](https://www.financedigest.com/the-microalgae-based-product-market-to-grow-based-on-instilled-innovation.html "The Microalgae Based Product Market To Grow Based On Instilled Innovation"), challenging IFF Inc, Givaudan and Symrise.

KBC analysts said the combined group will be “a global powerhouse with a well-balanced portfolio and solid [growth prospects”](https://www.financedigest.com/vehicle-mounted-spotlights-market-industry-outlook-growth-prospects-and-key-opportunities.html "Vehicle Mounted Spotlights Market: Industry Outlook, Growth Prospects and Key Opportunities").

DSM, which makes vitamins and food supplements among others, reported a [24% drop](https://www.financedigest.com/german-gas-import-costs-surge-153-in-first-half-as-imports-drop-24.html "German gas import costs surge 153% in first half as imports drop 24%") in quarterly adjusted core earnings (EBITDA) to 278 million euros ($305.36 million), below the 280 million euros expected by analysts in a Vara Research poll.

The company [expects the tough conditions to persist in the current quarter](https://www.financedigest.com/ericssons-quarterly-core-profit-misses-expectations.html "Ericsson’s quarterly core profit misses expectations"), before improving in the second half.

We anticipate a stronger second [half of the year across all businesses](https://www.financedigest.com/another-lockdown-is-the-top-concern-of-nearly-half-of-uks-small-businesses.html "Another Lockdown is the Top Concern of nearly Half of UK’s Small Businesses") as inflationary pressure eases, as volumes recover, especially in China, and vitamin prices start to normalize,” DSM’s co-CEOs Geraldine Matchett and Dimitri de Vreeze said.

DSM’s sales fell 6% to 1.89 [billion euros](https://www.financedigest.com/unicredit-gets-ecbs-green-light-for-second-1-billion-euro-share-buyback.html "UniCredit gets ECB’s green light for second 1 billion euro share buyback"), missing analysts’ 2.04 billion euro estimate.

Analysts at J.P.Morgan said the results were affected by weakening volumes due to [“customer destocking and the company’s preference](https://www.financedigest.com/loyalty-subscription-services-and-the-importance-of-customer-preferences-in-modern-banking.html "Loyalty, Subscription services and the importance of customer preferences in modern banking") of profitability over low-priced volumes.

Firmenich reported [third-quarter sales](https://www.financedigest.com/food-group-danone-raises-2022-outlook-as-third-quarter-sales-beat-expectations.html "Food group Danone raises 2022 outlook as third-quarter sales beat expectations") of 1.23 billion Swiss francs ($1.37 billion), up 5.4% in constant currency, and a 14.4% rise in adjusted EBITDA to 242 million francs.

DSM said it would provide a full-year [guidance for the combined DSM-Firmenich group](https://www.financedigest.com/virtual-accounts-leading-payment-expert-calls-for-major-changes-in-wolfsberg-group-guidance-around-on-behalf-of-payments.html "Virtual Accounts: leading payment expert calls for major changes in Wolfsberg Group guidance around “On behalf of” payments") when it publishes half-year results on Aug. 2.

Shares in DSM and DSM-Firmenich fell around 2% in early trading.

(This story has been corrected to fix description of the company in paragraph 5)

($1 = 0.9104 euros)

($1 = 0.8960 Swiss francs)

(Reporting by Augustin Turpin and Lina Golovnya in Gdansk; editing by Milla Nissi and Ed Osmond)


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