UpdateWacker's Q2 net profit falls 77% on lower product prices

30 July 2013 11:42  [Source: ICIS news]

(adds segment financials, CEO comment throughout)

LONDON (ICIS)--Wacker’s net income attributable to shareholders fell by 77% year on year to €13.6m ($18.1m) in the second quarter of this year, with sales heavily pressured by lower prices for polysilicon and semiconductor wafers, the Germany-based chemicals firm said on Tuesday.

Company sales fell by 5.9% year on year to €1.15bn in the second quarter, while earnings before interest, taxes, depreciation and amortisation (EBITDA) in the second quarter fell by 22% year on year to €188.2m.

“In the face of a persistently difficult market and competitive environment, Wacker closed the first half of 2013 with satisfactory results,” said CEO Rudolf Staudigl.

“Our chemical divisions performed well during the April-through-June period. In polysilicon, low price levels and trade-policy risks remain a challenge.

"A compromise has now been found in the solar dispute between the EU and China. If this settlement is implemented, it could mark the start of another global photovoltaics upturn,” he added.

Wacker’s silicones division posted second-quarter sales of €437.2m, up by more than 3% year on year, while segment EBITDA grew by 11% to €66.3m, on the back of higher volume for all major product groups.

The polymers division saw its sales fall by 1% year on year during the quarter to €273.4m, primarily due to lower year-on-year prices, which were not fully offset by the division’s higher volumes. Second-quarter EBITDA at the division amounted to €44.4m, 2% lower year on year.

Wacker’s Biosolutions business reported sales of €40.5m for the April-June quarter, up slightly from €40.1m in the year ago period, although EBITDA decreased by €1.2m year on year to €5.9m.

In its Polysilicon business, sales during the second quarter fell 29% year on year to €203.3m, mainly caused by solar-silicon prices, which were about one-third lower than in the same period last year. Second-quarter EBITDA from the polysilicon segment declined by 47% to €64.0m.

Siltronic posted total sales of €200.1m in the second quarter, down from €247.4m during the same period in 2012 on lower year-on-year prices for silicon wafers. Segment EBITDA for the second quarter was €9.1m, €3.9m less than reported in the year-ago period.

For the first six months of this year, the firm’s total net profit fell by 82.7% year on year to €17.7m, while sales slipped by 7.9% to €2.23bn.

Wacker now expects its sales to reach around €4.5bn in 2013, down from the €4.63bn it posted last year, although the company added this would only be achieved if there is no escalation in the trade dispute over Chinese solar products. Wacker remains firmly opposed to US and EU trade tariffs on imported solar products from China.

“This forecast is based on prices that are weaker than last year, especially for polysilicon and semiconductor wafers. In chemicals, Wacker expects higher full-year sales, thanks to volume growth amid lower prices. Overall, the price declines are likely to reduce group sales by some €350m,” the company said.

Wacker also reiterated that group EBITDA for 2013 is expected to remain below last year’s figure, primarily due to lower year-on-year prices for solar silicon and semiconductor wafers, while net income will be slightly positive, amid a year-on-year rise in depreciation and a higher negative financial result.

“At the chemical divisions, EBITDA is projected to edge above the prior-year figures,” it added.

($1 = €0.75)

Additional reporting by Nurluqman Suratman


By: Franco Capaldo
+44 (0)20 8652 3214



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