March 19 (Renewables Now) - German chemicals company Wacker Chemie AG (ETR:WCH) today posted a 4% year-on-year rise in 2018 profit from continuing operations, reaching EUR 260.1 million (USD 295m), and confirmed its 2019 sales and earnings guidance that was shared earlier this month.
The Munich-based company, which has a dedicated polysilicon business, said that group earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 8% to EUR 930 million mainly due to business-interruption costs at the polysilicon plant in Charleston, Tennessee.
Higher raw-material and energy costs also hit earnings.
Group sales, though, went up by 1% as higher volumes and prices in Wacker’s chemicals business more than offset negative exchange-rate effects and lower prices for polysilicon, the company explained.
More details about the group results are available in the table below.
|Figures in EUR million||2018||2017|
|-- of which from Polysilicon division||823.5||1,120|
|-- of which from Polysilicon division||72.4||290.4|
|Net profit from continuing operations||260.1||250.1|
The 2017 bottom line includes proceeds of EUR 634.7 million from the deconsolidation of Siltronic as a group segment.
The company explained the 27% decrease in sales at the Polysilicon division with a marked decline in volumes and the fall in prices for polysilicon, primarily due to China’s decision to curb feed-in tariffs (FiTs) and cap the amount of new photovoltaic (PV) installations.
In 2019, Wacker Polysilicon is expected to experience a strong increase in volumes and a low-double-digit percentage increase in sales. EBITDA, however, will be substantially below the result in 2018 due to the fall in the selling price for solar-grade polysilicon and the impact of higher energy prices.
In the first two months of this year, the polysilicon division recorded sales figures that are slightly below the prior-year level regardless of strong volume growth, as average solar-grade polysilicon prices were lower.
Chief executive Rudolf Staudigl said that solar-grade polysilicon overcapacities in China are slowing the earnings trend at the company’s polysilicon business.
Overall, the group expects its sales to rise by a mid-single-digit percentage in 2019 and EBITDA to go down by 10%-20%, with a substantially lower margin. Group net profit is also expected to fall significantly.
For the first quarter of 2019, the group forecasts flat sales at around EUR 1.22 billion and a markedly lower EBITDA.
(EUR 1.0 = USD 1.135)