Umicore lowers profit forecast as chip shortage bites – Reuters

Oct 18 (Reuters) – Belgian materials technology and recycling group Umicore (UMI.BR) made a downward revision revised to its profit outlook on Monday to reflect a stronger than previously expected impact from the global semiconductor shortage and lower prices for platinum group metals (PGMs).
The maker of catalytic converters and battery materials for carmakers had increased its guidance in July, saying the company was ready to capitalise on the acceleration of electrification in the automotive industry.
"In automotive catalysts, the impact of the semiconductor shortage on car production is proving more severe than was anticipated at the end of July," the company said on Monday, sending its shares down 3.9% in early trade.
Umicore now expects its full-year adjusted earnings before interest and tax (EBIT) to approach 1 billion euros ($1.16 billion), having previously expected adjusted EBIT to exceed 1 billion euros.
The company has also lowered its sales expectations for cathode materials and postponed the start of commercial production at its Polish greenfield cathode materials plant in Nysa, citing demand adjustments in electric vehicle production.
JP Morgan said the cut to EV cathode expectations was something of a surprise.
"This is unexpected and, in fact, we believe bulls had been hoping for a raise in the guidance for this division," the broker said.
"This will likely be taken negatively as we believe it indicates Umicore is continuing to lose a substantial share in the competitive EV cathode material market, even in Europe."
Umicore said the impact of lower sales volumes is expected to be offset by a stronger than expected second half performance in cobalt and speciality materials, benefiting from high demand and attractive premiums.
($1 = 0.8636 euros)
Our Standards: The Thomson Reuters Trust Principles.
Subscribe for our daily curated newsletter to receive the latest exclusive Reuters coverage delivered to your inbox.
Analysts expect Apple Inc to unveil new Mac laptop computers with more powerful processor chips at an event that will be streamed later Monday.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Information, analytics and exclusive news on financial markets – delivered in an intuitive desktop and mobile interface.
Access to real-time, reference, and non-real time data in the cloud to power your enterprise.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2021 Reuters. All rights reserved