Poland’s Ciech enters losses in Q2, expects ‘elongated U-shaped’ recovery

LONDON (ICIS)–Ciech, the second largest European soda ash producer, posted a net loss of zloty (Zl) 5m ($1.3m) in the second quarter on the back of coronavirus pandemic-induced lockdowns across the region, the Polish producer said this week.

The company said it expects a recovery in the “shape of an elongated U” for most of its businesses.

(Zl)	Q2 2020	Q2 2019	Change (%)
Net result	-5.0m	20.5m	N/A
Revenue	689m	860m	-19.9%
EBITDA	133	172	-22.7%

Key points

– The financial results exclude the “discontinued operations” of the Ciech Zywice epoxy resins subsidiary, with a process to sell the unit to Polish company LERG under way. Ciech said completion of the sale was expected within a few months.

– The volume of soda ash sold by the company in Q2 fell by 14%, although Ciech said this compared favourably to the overall 37% second-quarter soda ash export decrease calculated for US producers and more of 20% decline for Turkish producers.

– At the end of Q2, Ciech’s net debt to EBITDA ratio “remained at the safe level” of 2.47.

Outlook

– “We carefully judge that in the case of the soda, salt and silicate business, the recovery will take the shape of an elongated U letter, and in the case of foams, we see a strong V-shape reflection. The remaining businesses do not feel any significant effects of the pandemic at the moment,” said Ciech’s CEO Dawid Jakubowicz.

– “At the same time, as a result of turbulence caused by the lockdown and economic slowdown, we are dealing with a delay in the implementation of the investment program, but its extension in the period of market uncertainty does not affect the goals set out in the Group’s strategy, but only the timing of their implementation.”

($1 = Zl 3.78)