German Covestro raises ’20 earnings outlook

Al Greenwood

08-Dec-2020

HOUSTON (ICIS)–Covestro’s 2020 earnings and cash flow should exceed its earlier forecasts because the fourth quarter turned out better than expected, the German producer said on Tuesday.

Covestro now expects to report €1.44-1.50bn in earnings before interest, tax, depreciation and amortisation (EBITDA). That is up from an earlier forecast of €1.20bn. The consensus estimates from analysts was €1.199bn, as published by Vara Research on 16 November 2020.

Covestro attributed the increase to higher margins in its polyurethane and polycarbonate (PC) segments.

Free operating cash flow should be €400-550m. Covestro had earlier expected cash flow to be zero to up to €300m. Covestro’s cash flow guidance rose with its forecast for EBITDA.

The consensus for cash flow was €309m.

Covestor expects core volumes to fall by 5-6% in 2020. That compares with growth of 2.0% in 2019.

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