Evonik core profit rises but misses expectations

German chemicals group Evonik Industries missed fourth-quarter core profit expectations on Thursday but reported a rise year-on-year and forecast further growth in 2022 even though it faces macroeconomic headwinds, said Reuters.

Evonik’s shares were down 2.6% as of 1420 GMT, after it reported adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of 502 million euros (USD556.77 million), 5% below analysts’ forecast of 526.6 million euros, but up 20% on the year.

“It is a difficult day for many chemicals producers,” Berenberg analyst Sebastian Bray said, also citing German peers Covestro and BASF, which were both trading down 3%. “The reason is macroeconomic worries – oil at USD115/barrel, labour cost inflation, some companies have missed estimates on margins squeeze from higher raw materials. This could indicate a more difficult operating environment than perhaps anticipated."

Evonik’s CEO Christian Kullmann, in reference to Russia’s invasion of Ukraine, told a press conference that the company’s energy supplies were secure as far as it could see, but was cautious of further prices increases. “Energy prices have already come to be a severe burden for our industry today. Another increase would now actually and clearly go beyond the threshold of pain,” he said.

Evonik made roughly 200 million euros in sales in Russia last year, just above 1% of the total figure, and Kullmann said it would continue the business to the extent possible. The Essen-based company forecast adjusted core profit to come in at 2.5 billion to 2.6 billion euros in 2022, above the 2021 figure of 2.38 billion euros. Adjusted core profit is expected to grow by at least 10% year-on-year in the first quarter.

As MRC reported before, Evonik is investing a three-digit million-euro sum in the construction of a new production plant for bio-based and fully biodegradable rhamnolipids. The decision to build the plant follows a breakthrough in Evonik's research and development. Rhamnolipids are biosurfactants and serve as active ingredients in shower gels and detergents. Demand for environ-mentally friendly surfactants is growing rapidly worldwide.

We remind that in February, 2020, Dow and Evonik entered into an exclusive technology partnership. Together, they plan to bring a unique method for directly synthesizing propylene glycol (PG) from propylene and hydrogen peroxide to market maturity.

Evonik is one of the world leaders in specialty chemicals. The company is active in more than 100 countries around the world and generated sales of EUR12.2 billion and an operating profit (adjusted EBITDA) of EUR1.91 billion in 2020. Evonik goes far beyond chemistry to create innovative, profitable and sustainable solutions for customers. About 33,000 employees work together for a common purpose: to improve life today and tomorrow.
MRC

Sweden’s leading chemistry group Perstorp, and partner companies Fortum and Uniper, has submitted an EUR97 million application to the EU Innovation Fund for Project Air. This unique project aims to build a production facility for sustainable methanol in Stenungsund, Sweden, which could reduce global CO2 emissions by 400,000 tonnes, equivalent to approximately 1% of Sweden’s territorial emissions, as per the company's press release.

The ambition is to already by 2026 achieve large-scale production of sustainable methanol, which in turn can be used in making chemical products with thousands of applications, enabling an improved climate footprint in several value chains.

The project is possible thanks to an innovative usage of biogas, hydrogen from electrolysis and residue streams, as well as carbon dioxide recovered from Perstorp’s own facilities, to produce the methanol. This means the project will utilize carbon atoms that would otherwise become CO2 emissions.

“The chemicals industry is a key player in the sustainable transformation of society. Making Project Air a reality is an urgent priority for Perstorp, our customers, and partners as it creates increased availability of sustainable chemical products throughout our value chains,” said Jan Secher, President and CEO of Perstorp. “This project is a unique opportunity, but also a challenge for Swedish industry and energy policy. It is one of several industrial transformation projects seeking to use biogas as a raw material, and Sweden should take steps to stimulate a sufficient supply for these purposes.”

Perstorp believes that Project Air with a modified application is well positioned to receive support from the EU Innovation Fund, but the company is also investigating alternate modes of future funding. The total investment in Project Air is expected to be EUR236,3 million.

As MRC reported previously, in December 2021, Perstorp, the world leader in the production of Trimethylolpropane (TMP), ramped up the capacity to meet growing demand from the European market. TMP is used to enhance the properties of numerous materials. Common applications include the use in saturated polyesters for coil coatings, polyurethanes for coatings and elastomers, acrylic acid esters for radiation curing, esters for synthetic lubricants, and for the surface treatment of pigments.

Perstorp Specialty Chemicals AB is a subsidiary of Perstorp Holding AB. The company was founded in 1881 and is based in Perstop, Sweden. Perstorp Specialty Chemicals AB manufactures chemical products. The company offers base and specialty polyols, formates, organic acids and formaldehyde products.
MRC

Technip Energies has renounced new business opportunities in Russia following its invasion of Ukraine, the head of the French oil and gas services provider said on Thursday, as its full-year margin guidance drove up shares, said Reuters.

"We have ceased to work on future business opportunities in Russia," Arnaud Pieton said in an earnings statement, but added that the potential financial impact of the crisis was "contained".

BP , Shell and ExxonMobil are among the oil majors that have announced plans to exit positions and joint ventures in Russia amid crippling sanctions on the energy-rich nation for what it calls a "special operation" in Ukraine. By the end of December, about 3.8 billion euros (USD4.22 billion), or 23% of Technip Energies' order backlog, was related to Russian projects in execution, said the firm, which specialises in engineering and technology for the energy sector.

As per MRC,TechnipFMC plc has announced the sale of 9 MM Technip Energies N.V. shares through private sale transactions. The sale price of the shares in the sale is set at EUR13.15 per share, yielding total gross proceeds of EUR118.4 MM.

As MRC reported earlier, in December 2021, Technip Energies provided the technology licensing and process design to SP Olefins (Taixing) Co. Ltd., for China’s first gas-cracking ethylene plant in Taixing, Jiangsu Province, China. The 780,000 tpy plant successfully started up in August 2019, reaching on-spec olefins shortly thereafter. Earlier last year, the plant passed all performance guarantees, and the final acceptance certificate was recently issued, which was delayed due to COVID-19. The Taixing plant is not only the first gas-cracking ethylene plant in China, but also the first plant to use imported US ethane as feedstock.
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We try to stop the war together. We address all our partners and colleagues, as the current situation simply leaves no choice.

We ask you to express the principled ground of your companies and put out a call to stop the war, which can lead to catastrophic consequences for the whole world.

In 1994, Ukraine voluntarily gave up the third largest global nuclear arsenal to strengthen the peace on our planet. Today Ukraine is attacked, with Russia violating all security guarantees.

The Russian nuclear forces are on high combat alert today, affecting global stability. We must stop this together!

MRC team

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