Wacker: Low silicon prices lead to declining sales

In the second quarter of 2019, German Wacker Chemie AG increased sales revenue and EBITDA compared with the previous quarter, but failed to match the corresponding prior-year figures. In the quarter under review, the Munich-based chemicals group generated sales revenue of €1,268.5 million ($# million) compared to €1,329.9 million in Q2 2018. Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to €210.7 million ($# million), 19 percent less than in the previous year (€260.5 million). According to the company, the decisive factor for this decline was »lower prices overall, above all for solar silicon, but also for standard silicones«. The result for the period under review amounted to €37.2 million ($# million) compared to €83.5 million in Q2 2018.
»Market conditions continue to be difficult in the solar silicon business,« said Group CEO Rudolf Staudigl. The Polysilicon Division generated total sales of €169.9 million ($# million) in the quarter under review. This is 30 percent less than in the previous year (€242 million). The main reason for this decline is the significantly lower average prices for solar silicon. Slightly lower sales volumes than in the previous year also reduced revenue. Compared with the previous quarter (€211.1 million), revenue declined by 20 percent. Wacker Polysilicon's EBITDA amounted to €5.7 million ($# million) in the quarter under review. This is 85 percent less than in the previous year (€39.1 million).
Compared to the previous quarter (€-35.8 million), the division increased EBITDA by €42 million. On the one hand, this is the result of »operational improvements« in order to further optimize production processes. In addition, the division had retained advance payments of €19 million received from a solar customer in the quarter under review.
The forecast for 2019 as a whole remains unchanged. Wacker expects consolidated sales for 2019 to remain a mid-single-digit percentage higher than in the previous year (€4,978.8 million). EBITDA is expected to be 10 to 20 percent below the prior-year figure (€930 million). In view of the global slowdown in economic momentum and the still outstanding recovery in the Chinese solar market, Wacker now expects full-year EBITDA to be at the lower end of this range.
© PHOTON

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