Wacker Chemie sees 2024 core profit in upper guidance range as orders pick up
Sees 2024 EBITDA between 700 mln and 800 mln euros
Lower Q2 total sales dragged by weaker polysilicon business
Q2 EBITDA above analyst estimates of 160.1 mln euros
Adds CEO quote, analyst quote, share movement, details on polysilicon division, peer performance
By Antonis Pothitos and Matteo Allievi
July 26 (Reuters) -German chemical company Wacker Chemie WCHG.DE expects full-year core profit in the upper half of a previously-forecast range from 600 million to 800 million euros, as orders pick up in the second quarter, the company said on Friday.
Chief Executive Christian Hartel pointed to the first signs of a recovering economy, although a sustained turnaround was not yet in sight.
"Inflation rates are dropping faster than expected, and energy and raw material prices have eased," Hartel added. "Order intake in the chemical industry has improved."
In June the Ifo economic institute said the business climate in Germany's chemicals industry had returned to positive territory for the first time since the start of war in Ukraine, with improving demand and volumes brightening the outlook.
The specialty chemicals maker posted earnings before interest, taxes, depreciation and amortisation (EBITDA) of 160.1 million euros ($173.82 million), beating the 156.7 million euros expected by analysts in a company-provided poll, but down 37% from the year-ago figure of 255.5 million.
Hartel said demand had increased considerably from makers of consumer products, such as paints and packaging.
However, the Munich-based group narrowed its EBITDA guidance in the polysilicon business to the lower half of its previous range, between 200 million and 300 million euros.
"The lower fiscal year 2024 guidance indicates that Wacker has been able to move some of the remaining customers or volumes to ex-China prices but may be struggles more than anticipated with some other clients," a Baader analyst wrote in a note.
Wacker's total sales were down 16% from April to June compared with the corresponding period last year, reaching 1.47 billion euros, due to much lower solar-grade polysilicon volumes.
Wacker also confirmed its full-year sales guidance between 6 billion and 6.5 billion euros.
German peer BASF BASFn.DE eked out on Friday a gain of 0.6% in adjusted second-quarter earnings as slightly higher sales volumes made up for lower chemical prices.
Wacker's shares were down 0.1% by 0818 GMT.
($1=0.9211 euros)
Reporting by Antonis Pothitos and Matteo Allievi in Gdansk; Editing by Himani Sarkar and Clarence Fernandez
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
