October 17 (Renewables Now) - German chemicals company Wacker Chemie AG (ETR:WCH) on Tuesday warned that its 2019 EBITDA will be around 30% lower than in the previous year, mainly due to the “extremely low” prices of polysilicon.
The company previously anticipated its earnings before interest, tax, depreciation and amortisation (EBITDA) to be 10%-20% below the 2018 level. Sales, meanwhile, are anticipated to remain unchanged from a year earlier, against an earlier outlook for a mid-single-digit percentage increase.
Wacker Chemie’s CEO Rudolf Staudigl explained that the earlier guidance was based on assumptions that polysilicon prices will recover in the second half of the year. Due to overcapacity created by Chinese rivals, however, the average prices of the material have dropped even further, a trend with an effect that was also intensified by the “increasing weakness of the global economy.”
The German firm expects to book a full-year net profit that is “slightly positive,” against earlier prognosis for a bottom line that is substantially lower than the previous year level. Net cash flow is projected to be “clearly positive,” but lower than last year.
According to preliminary and unaudited figures, Wacker Chemie's EBITDA for the third quarter is seen at EUR 270 million (USD 300.2m), while group sales are expected to be at around EUR 1.27 billion.
The company said it will undertake a comprehensive programme that will prepare it for future challenges, with a focus on efficiency and cost savings. Its financial report for the third quarter will be released on October 24.
(EUR 1.0 = USD 1.112)