Covestro posts third quarter declines in sales, earnings

Leverkusen, Germany – Covestro has reported a 22.7% year-on-year decline in third quarter sales to €3.6 billion, with earnings (EBITDA) coming in 8.3% lower than a year ago, at €277 million.

The business declines reflected a “persistently difficult market environment with continued low demand in all regions,” the polycarbonate and urethane chemicals maker reported 27 Oct.

Sales were largely impacted by lower selling prices, while the dip in earnings reflected exchange rate movements and lower volumes-sold due to lower demand.

The decline in selling prices was more than offset by a drop in raw material and energy prices from extremely high levels in the prior-year third quarter.

Lower selling and admin expenses and a decrease in fixed cost of goods thanks to the Group’s strong focus on efficiency also had a positive effect, Covestro reported.

“Again, there was no significant revival of the economic activity in the third quarter, with global demand remaining at a very weak level,” commented Dr. Markus Steilemann, CEO of Covestro.

“Covestro is thus all the more committed to creating the right framework: we are operating efficiently and with a high degree of cost consciousness,” according to Steilemann.

The group, he added, is “investing in the global expansion of our capacities using innovative technologies [as we] orient ourselves towards the circular economy.”

Given current trends, Covestro has shifted its earlier guidance to the lower end of expectations: EBITDA now projected to come in at around €1.1 billion.

“Economic activity is weak, demand is low and the outlook for our core industries has deteriorated further, with the exception of the automotive industry,” said Christian Baier, CFO of Covestro.

“Accordingly, we have narrowed our guidance at the lower end of the given ranges,” said Baier. “At the same time, the group stands on a very stable foundation with a global presence and strong balance sheet.

Covestro’s GHG emissions measured as CO2 equivalents are projected to still be between 4.2 million and 4.8 million tonnes.

Highlighting its increasing contribution to a more climate-neutral and circular world, Covestro cited the start-up of a polyurethane elastomers plant at its site in Shanghai, China, this August.

Applications for the elastomer systems, which incorporate renewable feedstocks, include photovoltaic panels – so that they contribute to sustainability in two separate ways.