25 July 2012 10:54 [Source: ICIS news]
(adds detailed outlook, CEO comment throughout)
LONDON (ICIS)--Wacker Chemie expects full-year 2012 sales for the group to be slightly below the figure reported last year, as it anticipates a challenging economic environment marked by uncertainty, it said on Wednesday.
The German specialty chemical producer, in a second-quarter earnings announcement, said its earnings would be affected by the lower prices obtained for deliveries of solar silicon and by persistently high raw-material and energy prices.
“Wacker therefore reaffirms its view that earnings before interest, taxes, depreciation and amortization [EBITDA] for full-year 2012 will fall well short of the previous year’s figure,” it added.
The group’s total sales in 2011 were up 3% year on year to €4.91bn, but EBITDA fell 8% to around €1.1bn.
In its outlook for 2012, Wacker said although the photovoltaic market is likely to grow worldwide as customer demand for solar silicon continues to rise, a solar-sector consolidation currently underway could also put its customers in economic difficulty.
Wacker said this in turn, “could lead to the cancellation of individual supply contracts and failure to take full delivery of, or delayed taking delivery of, contracted quantities”.
This followed a number of high-profile insolvencies in Germany’s solar industry over past months amid tough international market competition, overcapacities, pricing pressures and cuts in German government subsidies for the sector.
“Given the sustained pressure on prices all along the solar industry’s supply chain, Wacker Polysilicon’s sales at the end of 2012 will fall short of last year’s levels,” the group said on Wednesday.
Looking at its semiconductor business, Wacker said the slowdown in consumer activity could result in stagnant wafer volumes for the second half of 2012, while at its chemical divisions, the group said it sees opportunities for additional growth this year, “in spite of the economic uncertainties and the enduring high energy and raw-material costs”.
On Wednesday, Wacker reported that its second-quarter net profit shrank by 57.5% year on year to €60.6m ($73m), with sales falling 7.8% to €1.22bn.
“Sales trends were dampened by significantly lower prices, especially in the solar-silicon and semiconductor-wafer businesses. Overall volumes were also slightly down a year ago,” Wacker said.
The group added that in
Earnings before interest, tax, depreciation and amortisation (EBITDA) during the quarter fell 26.0% to €240.5m, while Wacker’s second-quarter operating profit decreased 48.7% year on year to €110.3m, it added.
“We counter the increased risks [of economic and industry-specific challenges] by, for example, flexibly managing capacity utilisation at our production facilities. By doing so, we ensure that we can respond quickly and firmly to significant changes in customer demand,” said CEO Rudolf Staudigl.
It remains our primary goal to keep Wacker well on track despite the more difficult underlying conditions,” he added.
($1 = €0.83)
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