(Reuters) -Belgian chemicals group Solvay said on Wednesday its markets had been affected in the first half by tariff-related uncertainties and said its results had also been affected by negative foreign exchange movements.
“The level of business activity in the first half of 2025 has been impacted by the uncertainty around the tariff discussions and heightened geopolitical tensions,” CEO Philippe Kehren said in a statement as the company posted second-quarter core earnings in line with market expectations.
“Over the past few months, our industry has faced a soft market demand environment, and this is not expected to improve in the coming months,” Kehren added.
Challenging market conditions will prevent a consistent return to organic growth, making margin protection difficult, analysts at Degroof Petercam said in a note.
The group cut its 2025 core profit guidance earlier in July, after having narrowed it in the previous quarter, citing weaker orders in its Soda Ash unit and Brazil’s Coatis business, due to U.S. tariffs and geopolitical tensions.
“[On Coatis], we don’t know yet if the 50% tariff announced will or will not be implemented on the 1st of August, and we don’t know what will be the reaction of the Brazilian government, so there’s a high level of uncertainty,” CEO Philippe Kehren told journalists in a media call.
The division is also facing increased competitive pressure, especially from China and Latin America, weighing on volumes and prices, he added.
Solvay, which spun off speciality chemicals firm Syensqo in 2023, now expects to exceed its previous cost savings outlook of 200 million euros by the end of 2025, it said in a press release.
The group has trimmed costs amid weak demand and market volatility, raising its annual gross savings target to 350 million euros for 2028 from a previous 300 million euros in March.
When asked about the new EU-U.S. trade deal, the CEO told journalists the group would pass tariff costs on to customers.
“It’s very early to say what impact it will have on our own customers and if this will restore confidence in the market and restore a higher level of demand.”
The group’s underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 12.4% organically year-on-year to 230 million euros ($266 million) in the quarter, matching analysts’ average forecast, according to Vara consensus.
($1 = 0.8659 euros)
(Reporting by Dimitri Rhodes; Editing by Eileen Soreng and David Holmes)
