Belgian chemical group Solvay has lowered its full-year 2026 financial guidance after the Middle East conflict and the continued shutdown of a peroxide plant in Saudi Arabia hit its third-quarter performance.

 

The company reported preliminary third-quarter underlying EBITDA of €173 million on underlying net sales of €1.03 billion, with free cash flow to Solvay shareholders from continuing operations reaching €54 million.

 

Solvay now expects full-year underlying EBITDA of €720 million to €740 million and free cash flow of €120 million to €150 million, excluding any potential revenue or recovery measures linked to its Saudi operations for the remainder of the year.

 

The conflict in the Middle East reduced underlying EBITDA by approximately €25 million in the third quarter, following a negative impact of around €20 million in the second quarter, the company said.

 

The continued shutdown of the peroxide plant at the Sadara complex in Jubail, Saudi Arabia, accounted for nearly €15 million of the third-quarter EBITDA hit.

 

Solvay operates in Jubail through a joint venture with Sadara, which is majority-owned by Saudi Aramco. The company said it is exploring options to limit the financial damage, with contractual mechanisms in place that are designed to recover lost profitability.

 

The revised free cash flow target of €120 million to €150 million for 2026 is net of approximately €90 million in transformation expenses.

 

Despite the disruption, Solvay said it remains committed to its transformation programme, with a continued focus on cash generation and meeting its cost-saving targets.

 

The latest outlook underscores the financial pressure facing the group as geopolitical instability disrupts operations and weighs on earnings.

 

Solvay said it would not comment further before releasing its full third-quarter results on November 4, citing an ongoing quiet period.

 

Under the updated guidance, Solvay expects: Underlying EBITDA: €720 million to €740 million. Free cash flow to Solvay shareholders from continuing operations: €120 million to €150 million, after approximately €90 million in transformation expenses.

 

The figures are preliminary and remain subject to completion of the company's quarter-end closing process.