Overall, Degussa reported that its sales slipped 4 per cent to €2.69 billion, although in the core business, first-quarter sales were down 2 per cent to €2.63 billion, which Degussa said was 'entirely due to adverse exchange rate movements'.
Earnings before interest and taxes (EBIT) grew by 7 per cent to €224 million in the core business), and were up 5 per cent overall to €217 million. Group net income improved from €73 million in the first quarter of 2003 to €89 million.
In the Fine & Industrial Chemicals division - which makes up more than a quarter of Degussa's total core business - sales declined 9 per cent to €679 million, while EBIT slipped from €77 million to €58 million.
Within this, the C4-Chemistry business unit registered a substantial drop in earnings as a result of strong price pressure, while earnings were also lower in the Exclusive Synthesis & Catalysts and Building Blocks business units, chiefly because of price pressure and adverse exchange rate movements, according to Degussa.
The group's other divisions (constructions chemicals, polymers, performance materials, and coatings and advanced fillers) either showed a slight increase in turnover and EBIT or were flat compared to the first quarter of 2003.
The company added its own voice to those expecting an upturn for the chemicals industry in 2004, noting that "worldwide, there were signs of a slight economic recovery. Whilst the upturn is proving very sluggish in Germany and is only modest elsewhere in the euro zone, there has been a clear improvement in business conditions in North America."
Domestic market weak
This is reflected in Degussa's first quarter results, with core businesses in Germany experiencing an 11 per cent drop in sales while other European sales rose 7 per cent. Revenues in the North American Free Trade Area (NAFTA) slipped 5 per cent, but this was largely a result of the weak dollar/euro exchange rate.