German Covestro raises '20 earnings outlook

Author: Al Greenwood


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.