Chemical maker Sika's Q1 sales fall on soft construction demand
Adds details, background
April 17 (Reuters) -Swiss chemicals company Sika SIKA.S reported a 3% drop in first-quarter sales on Tuesday, after the construction chemicals maker saw demandfrom the building sector cool amidrising global interest rates, inflation and the war in Ukraine.
The company, which makes products to reinforce and waterproof walls, roofs and floors, said sales fell to 2,325.9 million Swiss francs ($2.59 billion) in the three months to the end of March, from 2,398.2 million Swiss francs a year earlier.
The figure was slightly below the 2.37 billion francs forecast by analysts at Bank Vontobel and the 2.35 billion francs estimate given by Zuercher Kantonalbank.
Sales in local currencies for the quarter rose 1.2%, down from the 21.9% increase in local currency sales a year earlier, when Sika benefited from a construction boom fueled by low interest rates and pent-up demand following the coronavirus pandemic.
Sika confirmed its guidance for 2023, saying it still expected to increase its sales in local currencies by 6% to 8%.
"As anticipated, the first quarter was challenging, but – given the recovery expected in the markets – we are sticking with our growth ambitions for full-year 2023," said Chief Executive Thomas Hasler in a statement.
The company said it was also still on track to sell parts of MBCC, the former BASF construction chemical business, to private equity company Cinven during the first half of the 2023.
($1 = 0.8971 Swiss francs)
Reporting by John Revill in Zurich and Jyoti Narayan in Bengaluru; Editing by Dhanya Ann Thoppil and Nivedita Bhattacharjee
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