Bloomberg News

Kemira Climbs as CEO Reassures Profit Will Grow: Helsinki Mover

February 09, 2012

Feb. 8 (Bloomberg) -- Kemira Oyj climbed the most in 20 months in Helsinki trading after Chief Executive Officer Harri Kerminen reassured investors that the maker of water-treatment chemicals will succeed in growing profits this year.

Kemira jumped as much as 10 percent, the most since May 26 2010. The shares in the Helsinki-based company rose 65 cents, or 6.7 percent, to 10.38 euros at 4:57 p.m. in the Finnish capital, making it today’s sixth-biggest winner in the Stoxx Europe 600 index.

“The company seemed to stand firm behind their forecast” in today’s telephone conference, Markku Jaervinen, an analyst at Evli Bank Oyj, said by phone today. The shares, which had advanced in earlier trading as Kemira reported earnings that beat estimates, added to gains after the call.

Kemira said 2012 revenue and operative earnings before interest and tax will increase “slightly” from last year, according to today’s earnings report. Fourth-quarter net income jumped 55 percent to 36.8 million euros ($48.8 million), beating the average estimate of 27.6 million euros in a Bloomberg survey.

“So far, analyst estimates had indicated a decline,” in 2012 sales and profits, Jaakko Tyrvaeinen, an analyst at FIM Bank Oyj in Helsinki, said by phone today. “The company management probably succeeded in reassuring people that the forecast could be achieved.”

Cost Savings

Kemira shares lost 14 percent on Nov. 18, the most in almost four years, when the company cut its forecast, saying 2011 profit and sales wouldn’t grow.

On today’s conference call, CEO Kerminen said the company is considering measures to improve profitability, including energy cost savings of 10 million euros this year.

Kerminen will retire on April 1, after 26 years at the company, and will be replaced by Wolfgang Buechele, who has been on the board for two years, the company said last year.

It’s too early to say what strategic changes Buechele, a former BASF SE, employee will bring to Kemira, Chief Financial Officer Jyrki Maeki-Kala said in an interview today.

Kemira’s aim this year is to consolidate sites in the U.S., Spain and Germany. The process follows the reduction of 60 million euros in costs in the last cost-cutting program, Maeki- Kala said.

“It gets harder and harder because we have done quite a lot over the last three years, there’s no low-hanging fruit anymore,” the CFO said.

Kemira is getting a boost from growth areas such as additives for tissues and chemicals used in shale gas. The key focus for expansion is emerging markets, Maeki-Kala said.

“Last year, shale gas really has been a success and we have gained a very nice business,” he said. “It seems that it’s still in a growth phase” in North America.

--Editors: Christian Wienberg, Kati Pohjanpalo

To contact the reporters on this story: Kasper Viita in Helsinki at kviita1@bloomberg.net; Andrew Noel in London at anoel@bloomberg.net

To contact the editor responsible for this story: Christian Wienberg at cwienberg@bloomberg.net


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