(Updates with share price)
By Marine Strauss
BRUSSELS, July 29 (Reuters) - Belgian chemicals group Solvay reported a smaller than expected fall in second-quarter earnings on Wednesday, thanks to cost-saving measures that accelerated due to the COVID-19 pandemic and some higher prices.
The maker of lithium derivatives for batteries reported free cash flow from continuing operations of 233 million euros ($274 million) for the second quarter, up 89.8% on the previous year.
Free cash flow generation in the first half was a record 435 million euros, CEO Ilham Kadri said in a statement.
The company said net sales were down 18% year-on-year in April-June, blaming demand declines in its businesses related to the oil and gas, aerospace, automotive and construction sectors.
Solvay shares were down 3.6% in early trading, among the weakest performers on the FTSEurofirst 300 index of leading European shares. The index itself was largely flat.
Solvay, whose products range from base chemicals such as soda ash to speciality polymers, said challenges were partly offset by growth in businesses related to healthcare, home and personal care and agri-food, with moderately higher prices across the group.
Second-quarter earnings before interest, tax, depreciation, and amortization (EBITDA) fell 29.5% from a year earlier to 439 million euros, above a company-compiled consensus of 427 million euros.
The group confirmed it would take a non-cash impairment charge of 1.46 billion euros, which it announced in June, with some 80% of that related to goodwill from Solvay’s $5.5 billion purchase in 2015 of Cytec, a U.S. specialist in aerospace materials and mining chemicals.
Solvay’s second-quarter revenue of 2.18 billion euros was also slightly above a consensus forecast of 2.13 billion euros.
The company said it expected its markets to remain challenging in the next three months before improving in the last quarter of the year.
$1 = 0.8508 euros Reporting by Marine Strauss @StraussMarine; Editing by Philip Blenkinsop and Mark Potter