Syensqo Cuts 300 to 350 Jobs to Support Growth, Yet Stock Surges by 6%!

Belgian chemical producer Syensqo on Tuesday announced a global layoff plan involving about 2 percent of its workforce aimed at supporting the company's long-term growth. The company beat analysts' profit expectations in its latest third-quarter results, sending its shares up more than 6% during the day.

In a statement, Syensqo said the job cuts would involve between 300 and 350 employees, mainly in countries such as France, the United States, Belgium and Italy. Following its spin-off from Belgian chemicals group Solvay last year, the company has reviewed its structure and projects in line with its medium-term financial targets to focus on growth opportunities and improve returns.

"The separation from Solvay Systems, which will end next year, will mean the creation of more than 700 new jobs in IT and systems infrastructure by 2025, as well as developments in business intelligence," CEO Ilham Qadri told reporters on a conference call.

Syensqo shares were up 6.6 percent by 0708 GMT, outpacing a 0.1 percent decline in the Stoxx index. The company also reported third-quarter earnings before interest, taxes, depreciation and amortization (EBITDA) of 374 million euros ($407.36 million), higher than the 360 million euros expected by analysts in a company-compiled consensus.

However, Syensqo also pointed to macroeconomic and industry uncertainties in several end markets, particularly in the aerospace and automotive sectors. "The automotive industry is about long-term trends, so short-term dynamics hit us, but the fundamentals are sound," Mr Qadri said.

Nevertheless, Syensqo raised its annual underlying EBITDA forecast, the second range change since last August. The company lowered its forecast to between 1.4 billion euros and 1.44 billion euros from 1.4 billion euros to 1.475 billion euros previously.

Chemical companies have been under pressure for more than a year as they have been forced to cut inventories amid soaring energy prices and falling demand from industrial customers. "Our outlook reflects seasonality in the fourth quarter, as well as the cash flow impact of the expected ebitda and Boeing strike and its related supply chain disruptions," Syensqo said.