Germany's Wacker's sales climb 45% in Q2 FY22

All four business divisions contributed to this sales growth. Polysilicon performed particularly well, with sales increasing by 68 per cent year over year, due to higher prices. The two chemical divisions – Wacker Silicones and Wacker Polymers – each grew by more than 40 per cent and demand was particularly strong, for example, for products used in adhesives and industrial coatings. Business in biotechnological products and fine chemicals also showed solid growth, with sales up by 16 per cent.

EBITDA (earnings before interest, taxes, depreciation and amortisation) totalled €625.8 million in the second quarter, almost double the figure of a year earlier (€320.9 million). Improved prices and product-mix effects were key growth drivers. Very high plant-utilisation rates also had a positive impact on EBITDA. On the other hand, significantly higher energy and raw-material prices had a negative effect. They were also the reason for a slight decline in EBITDA compared with a quarter earlier (€643.7 million). Wacker’s reporting-quarter EBITDA margin was 28.8 per cent. The margin in the preceding quarter was 31 per cent.

Despite significant risks to the global economy – due in particular to the impact of the war in Ukraine, but also to the ongoing coronavirus pandemic – Wacker expects to continue growing. The company raised its forecast for full-year 2022 and now expects to post sales of between €8 billion and €8.5 billion (previous guidance: €7.5 billion). Full-year EBITDA is likely to come in between €1.8 billion and €2.3 billion (previous guidance: between €1.2 billion and €1.5 billion). Higher energy and raw-material costs are likely to impact EBITDA by around €1.5 billion (previous guidance: €1.1 billion).

Given the uncertainty surrounding future natural gas supplies, WACKER has also taken the precaution of factoring in a further €200–250 million in additional costs at the lower end of its EBITDA forecast, on top of the energy and raw-material price increases already taken into account. Without this additional cost burden, full-year EBITDA of between €2 billion and €2.3 billion is possible in 2022.

“In the second quarter, Wacker continued on its growth trajectory in an increasingly challenging environment. Our quarterly sales were the highest in our company’s history. Earnings almost doubled year over year, as we were able to offset a large portion of our substantially higher energy and raw-material costs by raising our prices,” said CEO Christian Hartel in Munich. “However, we are increasingly concerned about the unabated price hikes for energy and raw materials. Added to that is uncertainty regarding future natural gas supplies.”

“The German government had already invoked Phase 2 of its emergency gas plan. This has not affected our production as yet. However, we have been working on solutions for various scenarios since February. It not only pushes up our own production costs, but also strongly influences consumer behaviour – and, in turn, our business.  The positive trend in selling prices and the strong demand we are currently seeing in our customer sectors allow us to look to the second half of the year with confidence – despite current uncertainty,” explained Hartel.

Fibre2Fashion News Desk (RR)