Middle East Conflict Cuts Solvay’s Third-Quarter Underlying Profit by €25 Million
Key Facts
Solvay said the Middle East conflict reduced underlying earnings before interest, taxes, depreciation and amortisation by about €25 million in the third quarter of 2026, following a negative impact of about €20 million in the second quarter. The company confirmed the figures in results published on November 4, after describing earlier sales, earnings and cash flow figures as preliminary and subject to completion of the closing process. The closure of the peroxide plant at the Sadara complex in Jubail was the main driver of the losses, accounting for about €15 million of the impact recorded in the third quarter. Chief Executive Philippe Kerin said the temporary plant closure is having a material effect on the company’s short-term performance. That puts the conflict’s impact among the leading operational pressures the company faced during the quarter.
The pressure extended to cash flow and earnings: Solvay’s net free cash flow attributable to shareholders from continuing operations was €54 million in the third quarter, compared with €117 million in the same period of 2025. Net underlying profit from continuing operations also fell to €35 million from €90 million in the third quarter of the previous year. To address these pressures, structural cost-cutting initiatives generated savings of €25 million during the quarter. Cumulative savings since the programme began reached €283 million, with the company targeting €300 million by the end of 2026. The savings highlight an ongoing effort to contain costs alongside the impact of halted production in Saudi Arabia.
Solvay kept its 2026 guidance unchanged at underlying earnings before interest, taxes, depreciation and amortisation of between €720 million and €740 million, and free cash flow attributable to shareholders from continuing operations of between €120 million and €150 million. The guidance excludes any potential revenue or recovery measures from Sadara during the rest of the year. The company said it is exploring ways to mitigate the impact, while the contractual framework includes mechanisms to recover lost profitability. The Jubail plant operates as part of a joint venture with Sadara, which is majority-owned by Saudi Aramco. Solvay said in the second quarter that it expected the peroxide plant in Saudi Arabia to resume operations during the third quarter, but the closure continued and affected the period’s results.
In rare-earth materials feedstocks, the company announced a long-term supply agreement with Viridis to secure strategic materials, with deliveries due to begin in 2028, and said its discussions with OneIM are ongoing. The board approved a total interim distribution of €0.97 per share, unchanged from the previous year, payable on January 20, 2027. The company set March 4, 2027, as the date for announcing its fourth-quarter and full-year 2026 results. Those results will be the next scheduled milestone for assessing annual performance against the guidance the company maintained. They will also show whether the Sadara-related mechanisms for recovering lost profitability were reflected in the subsequent period.