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(Add the sale of the superabsorbent business in paragraph 8, the CEO quote in paragraph 4, the buyback percentage in paragraph 9)
By Anastasiia Kozlova and Matteo Allievi
March 4 (Reuters) – German chemicals company Evonik Industries said on Monday it expected an economic recovery in 2024 and announced up to 2,000 job cuts worldwide through 2026.
The job cuts are expected to reduce costs by 400 million euros a year, the company said, adding that the majority – about 1,500 – would be in Germany.
Chemical corporations have been under pressure for more than a year, forced to take inventories as commercial consumer demand plummets in the face of rising energy prices.
“We will have to prepare for the continuation of the economic typhoon in the global economy,” CEO Christian Kullmann said on a conference call, adding that the company expects consumers to benefit from the recent drop in energy prices.
Evonik, which is used in parts ranging from animal feed and diapers to the Pfizer/BioNTech COVID-19 vaccine, expects adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for 2024 to be between $1. 7 billion and $2. 0 billion ($1. 84 billion-$2. 17 billion).
This compares with a result of €1. 66 billion for 2023, below the €1. 7 billion expected by analysts.
The outlook for 2024 is close to consensus and reassuring investors, JP Morgan said in a note.
Evonik, the market leader in the production of amino acids used in poultry feed, announced on Monday that it will sell its superabsorbent business to the International Chemical Investors Group (ICIG) for around €1 million in triple figures.
The Essen-based company also announced that it would buy back shares for an amount of up to €113. 8 million, transaction costs.
It will propose an annual dividend of €1. 17 per share, unchanged from last year.
Its 2023 fell by 17% to €15. 3 billion.
Sales in its functional fabrics division, which accounted for about 13 percent of the total, fell 22 percent to 2. 55 billion euros after the company sold a production in Luelsdorf in June.
Evonik shares rose 3. 7% at the market open before paring gains to 0. 9% by 1111 GMT ($1 = 0. 9216 euros) (Reporting by Anastasiia Kozlova and Matteo Allievi in Gdansk; editing by Jason Neely, Kirsten Donovan)