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Wacker projects swing to profit in 2020, lower sales due to COVID-19 impact on volumes

February 03/2021

MOSCOW (MRC) -- Wacker expects to post a net income of EUR200m in 2020, swinging from a net loss of EUR630m in 2019 on improved operational earnings, the German specialty chemicals firm said.

The company's earnings before income and taxes (EBIT) in 2019 were weighed by an impairment charge of EUR760m on the carrying amount of its polysilicon production facilities. Due to the coronavirus pandemic’s effects, the company’s sales contracted sharply in the second quarter, the company said in a statement.

The company's earnings regained some ground in the third and fourth quarters of last year, supported mainly by robust construction and polysilicon demand, but did not fully make up for the sales slump in the second quarter, it said. "Wacker's sales trend was slowed not only by somewhat lower volumes year over year, but also by price changes and exchange-rate effects," it said.

Volume declines amid the pandemic were especially strong in silicones for the automotive and textile segments, the company said. "Construction demand, on the other hand, remained comparatively stable, while business was very robust for products used in medical, health and hygiene applications," it added.

As per MRC, Wacker Chemie will cut 1,000 jobs by the end of 2022 to save costs and prepare for a “harsher competitive environment”. Munich-based chemical group Wacker Chemie AG has begun its “Shaping the Future” restructuring plan by announcing 1,000 jobs will be lost by the end of 2022 as it aims to save EUR250 million per year. The company announced around 800 posts will be culled at German sites with administrative staff and people working in indirect and non-operational roles those at risk.

Wacker Chemie AG is a worldwide operating company in the chemical business, founded 1914. The company is controlled by the Wacker-family holding more than 50 percent of the shares. The corporation is operating more than 25 production sites in Europe, Asia, and the Americas. The product range includes silicone rubbers, polymer products like ethylene vinyl acetate redispersible polymer powder, chemical materials, polysilicon and wafers for semiconductor industry.

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, neftegaz, petrochemistry, Wacker Chemie.
Category:General News
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