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UPDATE 1-DSM predicts strong annual earnings growth as auto industry recovers

(Recasts with earnings outlook, adds CEO’s quote and details on quarterly numbers)

AMSTERDAM, Feb 16 (Reuters) - Dutch speciality chemicals company DSM on Tuesday forecast strong profit growth in 2021, after a recovery in demand for its plastics and other materials from car makers led to a higher-than-expected quarterly core profit. DSM, whose products range from vitamins and food supplements to materials used in construction, clothing and automobiles, said it expected double-digit growth of its adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) this year.

Earnings increased 5% in the last three months of 2020, to 390 million euros ($473.3 million), beating analysts’ expectations for a roughly stable result and limiting the loss for the whole year to 1%.

“Materials saw a very strong demand recovery driven by the automotive sector,” co-Chief Executive Officers Geraldine Matchett and Dimitri de Vreeze said in a statement.

Sales of the materials division increased 2% in the fourth quarter, after the COVID-19 pandemic had led to a deep slump earlier in the year.

The larger nutritional division increased sales by 10%, as demand for food supplements remained strong amid the global health crisis.

$1 = 0.8240 euros Reporting by Bart Meijer; Editing by Kim Coghill and Sherry Jacob-Phillips

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