By Tristan Chabba
(Reuters) -Dutch speciality chemicals maker DSM lowered its 2022 profit outlook on Tuesday after energy and raw material costs rose in Europe in the third quarter.
The group, which is revamping its portfolio to focus more on the food ingredients and health products markets, expects adjusted core earnings (EBITDA) from continuing operations to grow by a low-single-digit percentage this year, against a previous forecast of high-single-digit growth.
"We continue to counter rising energy and raw material prices, which accelerated especially in Europe, albeit with a time lag," said co-CEOs Geraldine Matchett and Dimitri de Vreeze.
DSM said it expects the widening gap between costs and prices to dent earnings in the fourth quarter.
Its third-quarter adjusted EBITDA from continuing operations rose by 3% to 356 million euros ($353 million) versus the 359 million expected by analysts.
The company's shares were down 2.7% at 1412 GMT.
"This is an uncharacteristically weak quarter from DSM," ING analysts said in a note, adding that it had expected the company to pass on more of its increased costs to consumers.
Rivals Givaudan and Symrise this month said they had managed to pass on the bulk of their higher input costs.
DSM, which in May struck deals to take over Swiss flavour and fragrance maker Firmenich and sell its engineering materials division, said it had made good progress towards closing both deals .
The Firmenich merger and the sale of its engineering materials business are expected close as early as the first quarter of 2023, co-CEO De Vreeze said at an investor presentation.
DSM is confident of meeting mid-term targets, the company added.
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