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Covestro issues preliminary earnings forecast, will beat consensus

July 10/2020

MOSCOW (MRC) -- Covestro says its forecast preliminary EBITDA for the second quarter will be above market consensus at EUR124 million (USD141 million), with an expected preliminary net loss for the period of EUR60 million also beating consensus, said Chemweek.

Ahead of the scheduled release of its second-quarter and half-year results on 23 July, Covestro says in the course of preparing its half-year report that preliminary key financial data deviate from capital market expectations. The market expectations are based on the latest consensus estimates of financial analysts provided by Vara Research, it says.

Covestros estimate of a preliminary net loss of EUR60 million for the quarter compares to a steeper estimated consensus loss of EUR107 million, while its forecast EBITDA of EUR124 million compares to a lower consensus estimate of 80 million, according to the company. Preliminary sales are forecast by Covestro to come in lower than the consensus estimate of EUR2.22 billion at EUR2.16 billion, it says.

Preliminary sales volumes were down 22% in the quarter, with consensus putting the decline at 22.5%. In April Covestro reported a fall of almost 90% year on year in its first-quarter net income to EUR20 million on sales that declined more than 12% to EUR2.8 billion, with all business segments hit hard by the COVID-19 pandemic and lower selling prices. Last month it also placed a Eurobond with a total volume of EUR1.00 billion in the capital markets, the proceeds of which would be used to strengthen the companys liquidity in the current macroeconomic environment. In May it announced it was reducing working hours in Germany and cutting salaries of all employees for six months starting 1 June in response to the pandemic and the decline in consumer demand.

As MRC informed earlier, Covestro has closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy.

According to MRC's ScanPlast report,  Russia total estimated consumption of PC granules for the four months of 2020 (excluding imports and exports to Belarus) amounted to 30.5 thousand tons, which is 20% higher than last year (25.3 thousand tons).

Covestro (formerly Bayer MaterialScience) is an independent subgroup within Bayer. It was created as part of the restructuring of Bayer AG from the former business group Bayer Polymers, with certain of its activities being spun off to Lanxess AG. Covestro manufactures and develops materials such as coatings, adhesives and sealants, polycarbonates (CDs, DVDs), polyurethanes (automotive seating, insulation for refrigerating appliances) etc. With 2018 sales of EUR 14.6 billion, Covestro has 30 production sites worldwide and employs approximately 16,800 people (calculated as full-time equivalents) at the end of 2018.
Author:Anna Larionova
Tags:petroleum products, crude oil, PK, PC granules, PC compounds, petrochemistry, Covestro.
Category:General News
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