Wacker Polysilicon's EBITDA doubles after SunEdison settlement

The profitability of Wacker Chemie AG’s (ETR:WCH) polysilicon division improved significantly in the second quarter (Q2) of 2015, mainly thanks to a settlement with SunEdison Inc (NYSE:SUNE).

The German chemicals producer on Monday reported earnings before interest, tax, depreciation and amortisation (EBITDA) of EUR 161.4 million (USD 177m) for Wacker Polysilicon in April-June 2015. This represents an increase of 83.6% year-on-year and 105.1% quarter-on-quarter.

US renewables major SunEdison said in May it would pay nearly EUR 76.8 million in installments over 2015 to Wacker Chemie after they settled a dispute related to polysilicon supply deals. The German company also retained EUR 24.1 million in deposits previously paid by SunEdison. When such effects are excluded from the calculation, Wacker Polysilicon’s Q2 EBITDA fell by 15% on the year as a result of lower polysilicon prices and higher start-up costs for the firm’s new polysilicon factory in the US state of Tennessee.

The division saw its total sales declined by 4% year-on-year and nearly 10% quarter-on-quarter to EUR 261.3 million.

As for the full 2015, Wacker Chemie expects slightly higher volumes and sales at the polysilicon unit. Yet, it noted that overcapacity persists along the entire supply chain. Wacker Polysilicon’s EBITDA for the year is forecast to decrease “significantly” in annual terms.

Wacker Chemie reported consolidated EBITDA of EUR 329 million in Q2 2015, an increase of 43% over Q2 2014. Earnings before interest and tax (EBIT) more than doubled to EUR 187.9 million, thanks to the special income from the polysilicon arm.

(EUR 1 = USD 1.097)

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