Wacker Chemie posts 2% sales growth in Q1 2019

However, earnings declined significantly amid a challenging market environment for solar-grade polysilicon and substantially higher energy prices.

Wacker’s polysilicon business saw strong volume growth, but average solar-grade polysilicon prices declined markedly versus a year ago. Changes in exchange rates had a positive impact on the year-over-year sales trend. Compared with the preceding quarter (€1,188.6 million), sales were up 4 per cent, mainly due to volume growth.

In Q1 2019, Wacker posted EBITDA (earnings before interest, taxes, depreciation and amortization) of €142.0 million, down 44 per cent than a year ago (€254.5 million). In addition to the substantial drop in average solar-grade polysilicon prices, earnings were slowed by higher energy prices and by a temporary outage at a silicone-rubber plant. Compared with a quarter ago (€173.3 million), EBITDA contracted 18 per cent. The EBITDA margin for January through March 2019 was 11.5 per cent, versus 20.9 per cent a year earlier and 14.6 per cent a quarter ago.

Meanwhile, Wacker’s full-year 2019 forecast as published in the Annual Report for 2018 remains unchanged. The company continues to expect that Group sales for 2019 will grow by a mid-single-digit percentage relative to last year (€4,978.8 million). EBITDA is likely to decline by 10 to 20 per cent versus last year’s figure (€930.0 million), a Wacker press release said.

“Wacker’s business in Q1 2019 was characterised by volume growth, somewhat better prices for chemical products and persistently challenging conditions in the solar market,” said CEO Rudolf Staudigl. “Apart from an unplanned stoppage at one plant, the silicone business continued to develop solidly. Our silicone product mix is of excellent quality with high-margin specialties, and we achieved somewhat higher prices here versus a year ago. In our polymer business, we continued growing both our volumes and sales in the first quarter. Better prices were an additional factor.

“For our polysilicon business, on the other hand, the market environment posed significant challenges. Many market observers expect the price level for solar-grade polysilicon to improve in the second half-year. But there were no signs of such a trend in the reporting quarter. In addition, electricity costs at our German sites have increased substantially within the space of a year. To counter price and cost pressure, we are not only working on enhancing our production processes and thus reducing our costs. We are also striving to expand our market share of higher-margin business with our high-quality polysilicon for semiconductor applications and monocrystalline solar cells.” (RKS)

Fibre2Fashion News Desk – India