* Earnings to face 150 mln-200 mln euro hit in 2021
* Cash flow for 2021 set at upper end of earlier guidance
* Quarterly results beat expectations
May 5 (Reuters) - Belgian chemicals group Solvay
said on Wednesday it expected rising raw material and logistics
costs to hit results this year after oil prices rebounded and a
container shortage pushed up freight rates.
The company, whose products range from base chemicals such
as soda ash to speciality polymers used in cars and planes,
expects higher costs to dent earnings by 150 million euros to
200 million euros ($179.81 million-$239.74 million).
Storms in the U.S. and disruption at the Suez Canal after a
ship blocked the waterway for six days in March added to global
container shortages that have driven up rates.
"You start from a relatively low base in 2020 and you see
inflation on all the basic commodities, related to hydrocarbons
and others," Chief Finance Officer Karim Hajjar told a
The group narrowed its free cash flow target for this year
to 650 million euros, at the upper end of its previous guidance
of 600 million to 650 million euros, helped by its restructuring
Solvay raised its cost cuts target in February to 500
million euros by 2024, from 350 million euros, and said it
planned to cut 500 jobs by 2022. That followed a reduction of
570 positions last year in the United States and Britain.
It said it completed five out six planned unit sales in the
first quarter and expected to finalise the last one in the
second quarter. The six units represent 300 million euros in
Sales in January-March were up an underlying 1.9% at 2.37
billion euros, above a company-provided consensus of 2.32
The company, which makes lithium derivatives for batteries,
said automotive sales were up an underlying 19%, boosted by an
80% jump in hybrid and electric vehicle batteries. This helped
offset weakness in civil aerospace due to COVID-19 restrictions.
First-quarter earnings before interest, tax, depreciation
and amortization (EBITDA) rose 10.3% like-for-like from a year
earlier to 583 million euros, above a company-provided consensus
of 535 million euros.
($1 = 0.8342 euros)
(Reporting by Kate Entringer in Gdansk. Editing by Mark Potter)